Tremor International Ltd. (AIM/NASDAQ: TRMR) (“Tremor” or the
“Company”), a global leader in Video, Data and Connected TV (“CTV”)
advertising offering an end-to-end technology platform that enables
advertisers to optimize their campaigns and media partners to
maximize yield on their digital advertising inventory, today
announces its financial results for the fourth quarter and
twelve-month period ended December 31, 2021.
Fourth Quarter and Full
Year 2021 Financial Highlights
Record Financial Performance Driven by
Strong Customer Adoption of Data-Powered End-to-End Technology
Platform, Increased CTV Spend, and Robust Traction Within
Self-Service and Tech-Enabled Programmatic Activity:
- Contribution ex-TAC increased
organically by 20% in Q4 2021 to $88.6 million compared to $74.0
million in Q4 2020 and increased organically by 64% for FY 2021 to
$302.0 million compared to $184.3 million in FY 2020
- Adjusted EBITDA increased 38% in Q4
2021 to $54.0 million compared to $39.1 million in Q4 2020 and
increased 166% for FY 2021 to $161.2 million compared to $60.5
million in FY 2020
- Contribution ex-TAC generated
internationally increased organically by 33% to $26.8 million in FY
2021 compared to $20.1 million in FY 2020
Strong Margin Profile and Balance
Sheet:
- Compared with other ad-tech peers,
Tremor has one of the highest margin and operational profitability
financial structures, which resulted in a 53% adjusted EBITDA
margin in Q4 2021 on a reported revenue basis, and 61% on a
contribution ex-TAC basis
- Cash position as of December 31,
2021: $367.7 million net cash
$75
Million Share
Repurchase Program
Overview:
- Board of Directors approved a $75
million share repurchase program under which Tremor is authorized
to purchase up to $75 million of its ordinary shares
- The share repurchase program is to
be financed via existing cash reserves
Strong CTV and Video
Performance Achieved Throughout
2021:
- CTV spend grew by 47% in Q4 2021 to
$62.5 million compared to $42.4 million in Q4 2020 and by 108% to
$201.0 million in FY 2021 compared to $96.7 million in FY 2020
- CTV Contribution ex-TAC grew by 32%
in Q4 2021 to $21.8 million compared to $16.5 million in Q4 2020
and by 118% in FY 2021 to $80.3 million compared to $36.8 million
in FY 2020
- CTV Contribution ex-TAC accounted
for 25% of total contribution ex-TAC in Q4 2021 compared to 22% in
Q4 2020 and accounted for 27% of total contribution ex-TAC for FY
2021 compared to 20% in FY 2020
- Video revenue represented 80% of
total Contribution ex-TAC for the twelve-month period ended
December 31, 2021, up from 78% in the twelve-month period ended
December 31, 2020
“We continue to drive strong growth and market
adoption within our end-to-end platform and delivered record
revenue and adjusted EBITDA for both the fourth quarter and full
year 2021,” said Ofer Druker, Tremor’s Chief Executive Officer.
“Our strategy to provide the market with a robust data driven
end-to-end tech platform offering simplicity for customers with a
focus on Video and CTV, resulted in contribution ex-TAC growth of
20% in Q4 2021 compared to Q4 2020, and 64% growth for the full
year 2021. Underpinning our strong growth was an increase in
customer spend on our CTV services, which increased 108% across our
platform during 2021. Our differentiated strategy, as well as our
ability to generate strong operating leverage and growth within our
self-service offerings, contributed to strong profitability which
drove full year adjusted EBITDA of $161.2 million and growth of
166% for 2021, resulting in a 53% adjusted EBITDA margin, which we
believe is best in class for our industry.”
Fourth Quarter and Full
Year 2021 Operational
Highlights and Business Wins
- Signed a unique
and meaningful partnership with VIDAA, a subsidiary of Hisense, for
exclusive global access to Automatic Content Recognition(“ACR”)
data which begins on May 1, 2022
- The agreement is expected to accelerate the Company’s US and
international growth starting in the second half of 2022 in key
markets such as Canada, Australia, the UK and Germany
- Provides access to VIDAA’s distribution, reaching approximately
20 million smart TVs worldwide, which VIDAA expects to grow to more
than 40 million in the coming years
- In January 2022, VIDAA also selected Unruly as its strategic
Supply-Side Platform (“SSP”) to enable global access to all its
video and native display media, while also integrating our newly
acquired Spearad, to better enable control over its CTV ad delivery
with granular ad pod controls and targeting
- Acquired Spearad GmbH, a global CTV
ad server and header bidder featuring a robust user interface with
advanced tools for ad pod monetization, for $11.0 million, using
the Company’s existing cash reserves
- Increased innovation and investment
within CTV through the following new product launches in Q4 and FY
2021:
- Tremor Video’s Programmatic TV marketplace enabling advertisers
to gain access to a diversified marketplace that features premium,
TV-centric supply and curated Private Marketplace (“PMP”)
packages
- Unruly’s content-level targeting solution which allows buyers
to tap into traditional linear TV buying tactics with granular
targeting options like genre, rating and show title within digital
CTV and over-the-top environments, amidst growing privacy
regulations
- The ability to run display and audio campaigns within Tremor
Video Demand-Side Platform (“DSP”) to better enable large video
advertisers seeking complementary omnichannel solutions to their
video campaigns
- TV Intelligence solution, enabling in-house TV retargeting and
measurement solutions that provides advertisers with the ability to
reach and engage TV viewing audiences at scale with data-driven
creative
- Generated strong FY 2021 customer
net retention rates of 150.3%
- Tremor’s data-driven creative
offering, Tr. Ly, achieved a 74% increase in creative requests
during FY 2021 compared to FY 2020
- Unruly continued to experience
strong customer and partner traction:
- Added 42 new US supply partners
during Q4 2021 across critical growth verticals in sports,
entertainment, and lifestyle, as well as Original Equipment
Manufacturers (“OEM”) and Multicast Video On-Demand (“mVOD”)
businesses
- Unruly CTRL, Tremor’s self-service
platform for publishers, saw PMP revenues increase 184% during Q4
2021, compared to Q3 2021
- Tremor International successfully
executed a dual listing on the NASDAQ in June 2021 raising $134.6
million, net of issuance costs, in cash proceeds and enabling
strong exposure to US markets, greater access to capital and
increased access to a broader investor base
Mr. Druker added, “We strengthened our
end-to-end platform and CTV capabilities through two strategic
deals in the fourth quarter; the acquisition of Spearad, a robust
CTV ad server and header bidder; and an exclusive, unique, and
meaningful partnership with VIDAA which provides us exclusive
global ACR data access and will accelerate our US and international
growth. VIDAA further deepened its relationship with Tremor by
selecting Unruly as its strategic sell-side platform and will
integrate Spearad to facilitate greater control over its CTV ad
delivery with granular ad pod controls and targeting. We also grew
our investment in CTV innovation by launching our Programmatic TV
Marketplace which provides advertisers with a centralized platform
for planning TV campaigns. Additionally, we launched content-level
targeting which provides a new contextual solution amidst growing
privacy regulations and allows buyers to tap into linear TV buying
tactics with granular targeting options to segment within digital
environments like CTV. Our investments made during 2021 in
technology, sales, and marketing, significantly enhanced our
platform and drove record financial performance, while positioning
Tremor for continued future growth in both the US and international
markets. Finally, the Company’s strong balance sheet, with $367.7
million in net cash as of December 31, 2021, enables us to conduct
a substantial share repurchase while also continuing to evaluate
strategic opportunities to acquire companies, and invest in
technology, product, sales, and marketing to further expand our
platform as we move to monetize our exclusive data partnerships,
and continue to deliver material value for all stakeholders.”
About The Share Repurchase
Program
- The Board has authorized Tremor to
purchase up to $75 million of its ordinary shares on the AIM Market
(the “Authority”) and the repurchase program will be financed
through existing cash resources
- The repurchase program will be
independently managed by finnCap Ltd, the Company's AIM broker,
which will make trading decisions independently and without the
influence of the Company
- In accordance with the AIM Rules,
the repurchase program will be effected in accordance with the
Authority in that the maximum price paid per ordinary share is to
be no more than 105% of the average middle market closing price of
an ordinary share on AIM for the five business days preceding the
date of purchase
- The repurchase program will
commence March 1, 2022 and will continue until either September 1,
2022, or until it has been completed
- Share repurchases will be made in
accordance with applicable securities laws and regulations, and any
ordinary shares acquired as a result of the repurchase program will
be announced to the market without delay
- Any ordinary shares acquired as a
result of the repurchase program will be reclassified as dormant
shares under the Israeli Companies Law (without any rights attached
thereon) and will be held in treasury
- The share repurchase program does
not obligate Tremor to repurchase any particular amount of ordinary
shares and the program may be suspended, modified or discontinued
at any time at the Company’s discretion
- Due to the limited liquidity in the
issued ordinary shares, any repurchase of ordinary shares pursuant
to the Authority on any trading day may represent a significant
proportion of the daily trading volume in the ordinary shares on
AIM and may exceed 25% of the average daily trading volume, being
the limit laid down in Article 5(1) of Regulation (EU) No 596/2014
and, accordingly, the Company will not benefit from the exemption
contained in this Article
First Quarter
2022 Financial Guidance
- Management remains confident in the
medium- to long-term prospects of the Company with Tremor
well-placed to further benefit from the anticipated ongoing
resurgence in the global digital advertising industry
- Tremor’s guidance is based on the
expectation that the global economy will continue to recover and
that there will be no major Covid-19-related setbacks that may
cause economic conditions to deteriorate or otherwise significantly
reduce advertiser demand
- Our guidance also considers the
widespread global supply chain issues that limited advertising
activity in Q4 2021 in certain verticals such as automobile
manufacturing, with the anticipation that these challenges could
continue to have an impact in Q1 2022, as well as inflationary
pressures
- Our end-to-end platform and wide
range of revenue verticals help mitigate impacts faced by others
from these challenges and accordingly, Tremor estimates:
- Q1 2022 Contribution ex-TAC of at
least $73 million
- Q1 2022
Adjusted EBITDA of at least $33 million
Fourth Quarter 2021
Financial Highlights ($ in millions, except per share
amount)
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Three months ended December 31 |
|
Twelve months ended December 31 |
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|
2021 |
|
2020 |
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% |
|
2021 |
|
2020 |
|
% |
IFRS highlights |
|
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Revenues |
|
102.5 |
|
81.5 |
|
26% |
|
341.9 |
|
211.9 |
|
61% |
Programmatic Revenues |
|
74.5 |
|
67.3 |
|
11% |
|
266.6 |
|
161.6 |
|
65% |
Operating Profit/(Loss) |
|
24.4 |
|
20.8 |
|
17% |
|
74.5 |
|
(6.0) |
|
1,336% |
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|
|
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Total Comprehensive Income/(Loss) |
|
23.9 |
|
24.9 |
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(4)% |
|
70.6 |
|
5.0 |
|
1,319% |
Diluted EPS |
$0.15 |
|
$0.15 |
|
0% |
|
$0.48 |
|
$0.02 |
|
3,009% |
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Non-IFRS
highlights |
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Contribution ex-TAC |
|
88.6 |
|
74.0 |
|
20% |
|
302.0 |
|
184.3 |
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64% |
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Adjusted EBITDA |
|
54.0 |
|
39.1 |
|
38% |
|
161.2 |
|
60.5 |
|
166% |
Adjusted EBITDA Margin |
|
61% |
|
53% |
|
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|
53% |
|
33% |
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Non-IFRS net Income
(Loss) |
|
43.3 |
|
28.7 |
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51% |
|
126.8 |
|
38.3 |
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231% |
Non-IFRS Diluted EPS |
$0.27 |
|
$0.20 |
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35% |
|
$0.83 |
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$0.28 |
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201% |
Fourth Quarter
and Full-Year Ended December
31, 2021
Financial Results Webcast and Conference Call
Details
- Tremor International Fourth Quarter 2021 and Full-Year Ended
December 31, 2021 Earnings Webcast and Conference Call
- February 24, 2022 at 6:00 AM/PT, 9:00 AM/ET and 2:00
PM/GMT
- Webcast Link: https://edge.media-server.com/mmc/p/aiaow9os
- Participant Dial-In Number:
- US/CANADA Participant Toll-Free Dial-In Number: (888)
771-4371
- UK Participant Toll-Free Dial-In Number: +44 20 3147 4818
- INTERNATIONAL Participant Dial-In Number: (847) 585-4405
- Conference ID:50282787
Use of Non-IFRS Financial
Information
In addition to our IFRS results, we review
certain non-IFRS financial measures to help us evaluate our
business, measure our performance, identify trends affecting our
business, establish budgets, measure the effectiveness of
investments in our technology and development and sales and
marketing, and assess our operational efficiencies. These non-IFRS
measures include Contribution ex-TAC, Adjusted EBITDA, Non-IFRS Net
Income (Loss) and Non-IFRS Earnings (Loss) per share, each of which
is discussed below.
These non-IFRS financial measures are not
intended to be considered in isolation from, as substitutes for, or
as superior to, the corresponding financial measures prepared in
accordance with IFRS. You are encouraged to evaluate these
adjustments, and review the reconciliation of these non-IFRS
financial measures to their most comparable IFRS measures, and the
reasons we consider them appropriate. It is important to note that
the particular items we exclude from, or include in, our non-IFRS
financial measures may differ from the items excluded from, or
included in, similar non-IFRS financial measures used by other
companies. See "Reconciliation of Revenue to Contribution ex-TAC,"
"Reconciliation of net income (loss) to Adjusted EBITDA," and
"Reconciliation of net income (loss) to non-IFRS income (loss),"
included as part of this press release.
- Contribution
ex-TAC: Contribution ex-TAC is defined as our gross profit
plus depreciation and amortization attributable to cost of revenues
and cost of revenues (exclusive of depreciation and amortization)
minus the Performance media cost (“traffic acquisition costs” or
“TAC”). Contribution ex-TAC is a supplemental measure of our
financial performance that is not required by, or presented in
accordance with, IFRS. Contribution ex-TAC should not be considered
as an alternative to gross profit as a measure of financial
performance. Contribution ex-TAC is a non-IFRS financial measure
and should not be viewed in isolation. We believe Contribution
ex-TAC is a useful measure in assessing the performance of Tremor
International, because it facilitates a consistent comparison
against our core business without considering the impact of traffic
acquisition costs related to revenue reported on a gross
basis.
- Adjusted EBITDA:
We define as total comprehensive income for the period adjusted for
foreign currency translation differences for foreign operations,
financing expenses, net, tax benefit, depreciation and
amortization, stock-based compensation, restructuring, acquisition
and IPO-related costs and other expenses (income), net. Adjusted
EBITDA is included in the press release because it is a key metric
used by management and our board of directors to assess our
financial performance. Adjusted EBITDA is frequently used by
analysts, investors and other interested parties to evaluate
companies in our industry. Management believes that Adjusted EBITDA
is an appropriate measure of operating performance because it
eliminates the impact of expenses that do not relate directly to
the performance of the underlying business.
- Adjusted EBITDA
margin: we define as Adjusted
EBITDA as a percentage of Contribution ex-TAC.
- Non-IFRS Income (Loss) and
Non-IFRS Earnings (Loss) per Share: We
define non-IFRS earnings (loss) per share as non-IFRS income (loss)
divided by non-IFRS weighted-average shares outstanding. Non-IFRS
income (loss) is equal to net income (loss) excluding stock-based
compensation, cash and non-cash based acquisition and related
expenses, including amortization of acquired intangible assets,
merger related severance costs, transaction expenses. In periods in
which we have non-IFRS income, non-IFRS weighted-average shares
outstanding used to calculate non-IFRS earnings per share includes
the impact of potentially dilutive shares. Potentially dilutive
shares consist of stock options, restricted stock awards,
restricted stock units, and potential shares issued under the
Employee Stock Purchase Plan, each computed using the treasury
stock method. We believe non-IFRS earnings (loss) per share is
useful to investors in evaluating our ongoing operational
performance and our trends on a per share basis, and also
facilitates comparison of our financial results on a per share
basis with other companies, many of which present a similar
non-IFRS measure. However, a potential limitation of our use of
non-IFRS earnings (loss) per share is that other companies may
define non-IFRS earnings (loss) per share differently, which may
make comparison difficult. This measure may also exclude expenses
that may have a material impact on our reported financial results.
Non-IFRS earnings (loss) per share is a performance measure and
should not be used as a measure of liquidity. Because of these
limitations, we also consider the comparable IFRS measure of net
income (loss).
About Tremor International
Tremor is a global company offering an
end-to-end technology advertising platform, operating across three
core capabilities - Video, Data and CTV. Tremor's unique approach
is centered on offering a full stack of end-to-end 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. To learn more, visit www.tremorvideo.com
Unruly, the media side of Tremor, 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 premium 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 Ad
Age top 100 brands. To learn more, visit www.unruly.co
Tremor is headquartered in Israel and maintains
offices throughout the United States, Canada, Europe, Asia-Pacific
and is traded on the London Stock Exchange (AIM: TRMR) and NASDAQ
(TRMR).
For more information, visit:
https://www.tremorinternational.com/
For further information please contact:
Tremor International Ltd.Billy Eckert, Investor
Relationsir@tremorinternational.com
KCSA (U.S. Investor Relations)Adam Holdsworth,
Investor Relationsaholdsworth@kcsa.com
Vigo Consulting (U.K. Financial PR & Investor
Relations)Jeremy GarciaAntonia PollockKate KilgallenTel:
+44 20 7390 0230 or tremor@vigoconsulting.com
finnCap Ltd.Jonny Franklin-Adams / James
Thompson (Corporate Finance)Tim Redfern / Dicky Chambers (ECM)Tel:
+44 20 7220 0500
Stifel Nicolaus Europe LimitedFred WalshAlain
DobkinNick AdamsRichard ShortTel: +44 20 7710 7600
Forward Looking Statements
This press release contains forward-looking
statements, including forward-looking statements within the meaning
of Section 27A of the United Stated Securities Act of 1933, as
amended, and Section 21E of the United States Securities and
Exchange Act of 1934, as amended. Forward-looking statements are
identified by words such as “anticipates,” “believes,” “expects,”
“intends,” “may,” “can,” “will,” “estimates,” and other similar
expressions. However, these words are not the only way Tremor
identifies forward-looking statements. All statements contained in
this press release that do not relate to matters of historical fact
should be considered forward-looking statements, including without
limitation statements regarding the anticipated benefits of
Tremor’s strategic transactions and commercial partnerships;
anticipated features and benefits of Tremor’s products and service
offerings; Tremor’s positioning for continued future growth in both
the US and international markets; Tremor’s implementation of a
substantial share repurchase while also continuing to evaluate
strategic opportunities to acquire companies and invest in
technology, products, sales and marketing to further expand its
platform; Tremor’s intent to monetize our exclusive data
partnerships and to continue to deliver material value for its key
stakeholders; Tremor’s medium- to long-term prospects; the
anticipated ongoing resurgence in the global digital advertising
industry; the potential negative impact of the widespread global
supply chain issues that have limited advertising activity in Q4
2021 in certain verticals and the anticipation that these
challenges could continue to have an impact in the first quarter of
2022, as well as inflationary pressures and any other statements
related to Tremor’s future financial results. These statements are
neither promises nor guarantees but involve known and unknown
risks, uncertainties and other important factors that may cause
Tremor's actual results, performance or achievements to be
materially different from its expectations expressed or implied by
the forward-looking statements, including, but not limited to, the
following: negative global economic conditions, potential negative
developments in the COVID-19 pandemic and how those developments
may adversely impact Tremor’s business, customers and the markets
in which Tremor competes, changes in industry trends, other
negative developments in Tremor's business or unfavourable
legislative or regulatory developments. Tremor cautions you not to
place undue reliance on these forward-looking statements. For a
more detailed discussion of these factors, and other factors that
could cause actual results to vary materially, interested parties
should review the risk factors listed in Tremor’s Registration
Statement on Form F-1, which was filed with the U.S. Securities and
Exchange Commission (www.sec.gov) on June 17, 2021. Any
forward-looking statements made by Tremor in this press release
speak only as of the date of this press release, and Tremor does
not intend to update these forward-looking statements after the
date of this press release, except as required by law.
Tremor, and the Tremor logo are trademarks of
Tremor International Ltd. in the United States and other countries.
All other trademarks are the property of their respective owners.
The use of the word “partner” or “partnership” in this press
release does not mean a legal partner or legal partnership.
Reconciliation of Net Income to
Adjusted EBITDA
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|
|
|
|
|
|
|
|
|
|
Three months ended December 31 |
|
Twelve months ended December 31 |
|
2021 |
|
2020 |
|
% |
|
2021 |
|
2020 |
|
% |
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Net
Income |
24,400 |
|
21,185 |
|
15% |
|
73,223 |
|
2,139 |
|
3,323% |
Taxes benefit |
(601) |
|
(1,834) |
|
|
|
(948) |
|
(9,581) |
|
|
Financial expense (income), net |
564 |
|
1,404 |
|
|
|
2,187 |
|
1,417 |
|
|
Depreciation and amortization |
10,314 |
|
11,502 |
|
|
|
40,259 |
|
45,187 |
|
|
Stock-based compensation |
19,122 |
|
4,337 |
|
|
|
42,818 |
|
14,490 |
|
|
Other expenses |
- |
|
1,700 |
|
|
|
- |
|
1,700 |
|
|
Restructuring & Acquisition costs |
253 |
|
852 |
|
|
|
761 |
|
5,161 |
|
|
IPO related one-time costs |
- |
|
- |
|
|
|
2,938 |
|
- |
|
|
Adjusted
EBITDA |
54,052 |
|
39,146 |
|
38% |
|
161,238 |
|
60,513 |
|
166% |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Revenue to
Contribution ex-TAC
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31 |
|
Twelve months ended December 31 |
|
2021 |
|
2020 |
|
% |
|
2021 |
|
2020 |
|
% |
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
102,534 |
|
81,526 |
|
26% |
|
341,945 |
|
211,920 |
|
61% |
Cost of revenues (exclusive of depreciation and amortization) |
(20,348) |
|
(17,352) |
|
|
|
(71,651) |
|
(59,807) |
|
|
Depreciation and amortization attributable to Cost of Revenues |
(4,396) |
|
(4,858) |
|
|
|
(16,605) |
|
(19,596) |
|
|
Gross profit
(IFRS) |
77,790 |
|
59,316 |
|
31% |
|
253,689 |
|
132,517 |
|
91% |
Depreciation and amortization attributable to Cost of Revenues |
4,396 |
|
4,858 |
|
|
|
16,605 |
|
19,596 |
|
|
Cost of revenues (exclusive of depreciation and amortization) |
20,348 |
|
17,352 |
|
|
|
71,651 |
|
59,807 |
|
|
Performance media cost |
(13,958) |
|
(7,537) |
|
|
|
(39,970) |
|
(27,638) |
|
|
Contribution ex-TAC
(Non-IFRS) |
88,576 |
|
73,989 |
|
20% |
|
301,975 |
|
184,282 |
|
64% |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to
Non-IFRS Net Income
|
Three months ended December 31 |
|
Twelve months ended December 31 |
|
2021 |
|
2020 |
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% |
|
2021 |
|
2020 |
|
% |
($ in thousands) |
|
|
|
|
|
|
|
Net Income |
24,400 |
|
21,185 |
|
15% |
|
73,223 |
|
2,139 |
|
3,323% |
Acquisition and related items, including amortization of acquired
intangibles and restructuring |
6,939 |
|
8,721 |
|
|
|
27,233 |
|
33,776 |
|
|
Stock-based compensation expense |
19,122 |
|
4,337 |
|
|
|
42,818 |
|
14,490 |
|
|
IPO related one-time costs |
- |
|
- |
|
|
|
2,938 |
|
- |
|
|
Other expenses |
|
1,700 |
|
|
|
|
1,700 |
|
|
Tax effect of Non-IFRS adjustments (1) |
(7,200) |
|
(7,210) |
|
|
|
(19,435) |
|
(13,800) |
|
|
Non-IFRS
Income |
43,261 |
|
28,733 |
|
51% |
|
126,777 |
|
38,305 |
|
231% |
|
|
|
|
|
|
|
|
Weighted average shares outstanding—diluted (in millions) (2) |
161.0 |
|
140.3 |
|
|
|
152.7 |
|
138.7 |
|
|
|
|
|
|
|
|
|
|
Non-IFRS diluted EPS
(in USD) |
0.27 |
|
0.20 |
|
35% |
|
0.83 |
|
0.28 |
|
201% |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Non-IFRS income includes the estimated tax impact
from the expense items reconciling between net income and non-IFRS
income (2) Non-IFRS earnings per share is computed using
the same weighted-average number of shares that are used to compute
IFRS earnings per share.
TREMOR INTERNATIONAL LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
(Unaudited)
|
|
|
|
|
|
December 31
|
|
|
|
|
2021
|
|
2020
|
|
|
Note
|
|
USD thousands
|
Assets
|
|
|
|
|
|
|
ASSETS:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
10
|
|
367,717
|
|
97,463
|
Trade receivables, net
|
|
8
|
|
165,063
|
|
153,544
|
Other receivables
|
|
8
|
|
18,236
|
|
17,615
|
Current tax assets
|
|
|
|
981
|
|
2,029
|
|
|
|
|
|
|
|
TOTAL CURRENT ASSETS
|
|
|
|
551,997
|
|
270,651
|
|
|
|
|
|
|
|
Fixed assets, net
|
|
5
|
|
3,464
|
|
3,292
|
Right-of-use assets
|
|
6
|
|
13,955
|
|
18,657
|
Intangible assets, net
|
|
7
|
|
208,220
|
|
224,500
|
Deferred tax assets
|
|
4
|
|
24,431
|
|
*16,073
|
Other long term assets
|
|
|
|
672
|
|
1,834
|
|
|
|
|
|
|
|
TOTAL NON-CURRENT ASSETS
|
|
|
|
250,742
|
|
264,356
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
|
802,739
|
|
535,007
|
|
|
|
|
|
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES:
|
|
|
|
|
|
|
Current maturities of lease liabilities
|
|
6
|
|
7,119
|
|
9,047
|
Trade payables
|
|
9
|
|
161,812
|
|
125,863
|
Other payables
|
|
9
|
|
42,900
|
|
47,122
|
Current tax liabilities
|
|
|
|
8,836
|
|
3,162
|
|
|
|
|
|
|
|
TOTAL CURRENT LIABILITIES
|
|
|
|
220,667
|
|
185,194
|
|
|
|
|
|
|
|
Employee benefits
|
|
|
|
426
|
|
495
|
Long-term lease liabilities
|
|
6
|
|
7,876
|
|
12,162
|
Deferred tax liabilities
|
|
4
|
|
1,395
|
|
*319
|
Other long-term liabilities
|
|
20(c)
|
|
-
|
|
7,824
|
|
|
|
|
|
|
|
TOTAL NON-CURRENT LIABILITIES
|
|
|
|
9,697
|
|
20,800
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
|
230,364
|
|
205,994
|
|
|
|
|
|
|
|
SHAREHOLDERS’ EQUITY:
|
|
15
|
|
|
|
|
Share capital
|
|
|
|
442
|
|
380
|
Share premium
|
|
|
|
437,476
|
|
264,831
|
Other comprehensive income
|
|
|
|
698
|
|
3,330
|
Retained earnings
|
|
|
|
133,759
|
|
60,472
|
|
|
|
|
|
|
|
TOTAL SHAREHOLDERS’ EQUITY
|
|
|
|
572,375
|
|
329,013
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
802,739
|
|
535,007
|
|
|
|
|
|
|
|
Date of approval of the financial statements:
February 24, 2022
*See Note 2f
The accompanying notes are an integral part of these
consolidated financial statements.
TREMOR INTERNATIONAL LTD.
CONSOLIDATED
STATEMENTS OF
OPERATION AND OTHER COMPREHENSIVE
INCOME
(Unaudited)
|
|
|
|
|
Year endedDecember 31
|
|
|
|
2021
|
|
2020
|
|
2019
|
|
Note
|
|
USD thousands
|
|
|
|
|
|
|
|
|
Revenues
|
11
|
|
341,945
|
|
|
211,920
|
|
|
325,760
|
|
|
|
|
|
|
|
|
|
Cost of Revenues (Exclusive of depreciation and amortization
shown separately below)
|
12
|
|
71,651
|
|
|
59,807
|
|
|
187,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses
|
|
|
18,422
|
|
|
13,260
|
|
|
16,168
|
|
Selling and marketing expenses
|
|
|
74,611
|
|
|
68,765
|
|
|
52,351
|
|
General and administrative expenses
|
13
|
|
63,499
|
|
|
29,678
|
|
|
34,433
|
|
Depreciation and amortization
|
|
|
40,259
|
|
|
45,187
|
|
|
32,359
|
|
Other expenses (income), net
|
14
|
|
(959
|
)
|
|
1,248
|
|
|
(700
|
)
|
|
|
|
|
|
|
|
|
Total operating costs
|
|
|
195,832
|
|
|
158,138
|
|
|
134,611
|
|
|
|
|
|
|
|
|
|
Operating Profit (Loss)
|
|
|
74,462
|
|
|
(6,025
|
)
|
|
3,903
|
|
|
|
|
|
|
|
|
|
Financing income
|
|
|
(483
|
)
|
|
(445
|
)
|
|
(773
|
)
|
Financing expenses
|
|
|
2,670
|
|
|
1,862
|
|
|
1,088
|
|
|
|
|
|
|
|
|
|
Financing expenses, net
|
|
|
2,187
|
|
|
1,417
|
|
|
315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (Loss) before taxes on income
|
|
|
72,275
|
|
|
(7,442
|
)
|
|
3,588
|
|
|
|
|
|
|
|
|
|
Tax benefit
|
4
|
|
948
|
|
|
9,581
|
|
|
2,636
|
|
|
|
|
|
|
|
|
|
Profit for the year
|
|
|
73,223
|
|
|
2,139
|
|
|
6,224
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
(loss) items:
|
|
|
|
|
|
|
|
Foreign currency translation differences for foreign
operation
|
|
|
(2,632
|
)
|
|
2,836
|
|
|
139
|
|
|
|
|
|
|
|
|
|
Total other comprehensive income for the
year
|
|
|
(2,632
|
)
|
|
2,836
|
|
|
139
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year
|
|
|
70,591
|
|
|
4,975
|
|
|
6,363
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
|
|
|
Basic earnings per share (in USD)
|
16
|
|
0.51
|
|
|
0.02
|
|
|
0.06
|
|
Diluted earnings per share (in USD)
|
16
|
|
0.48
|
|
|
0.02
|
|
|
0.05
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
TREMOR INTERNATIONAL LTD.CONSOLIDATED
STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
|
|
|
Sharecapital
|
|
Sharepremium
|
|
Other comprehensive Income
|
|
RetainedEarnings
|
|
Total
|
|
USD thousands
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2019
|
198
|
|
|
72,663
|
|
|
355
|
|
51,053
|
|
|
124,269
|
|
Total Comprehensive income for the year
|
|
|
|
|
|
|
|
|
|
Profit for the year
|
-
|
|
|
-
|
|
|
-
|
|
6,224
|
|
|
6,224
|
|
Other comprehensive Income:
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
|
-
|
|
|
-
|
|
|
139
|
|
-
|
|
|
139
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year
|
-
|
|
|
-
|
|
|
139
|
|
6,224
|
|
|
6,363
|
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners, recognized directly in
equity
|
|
|
|
|
|
|
|
|
|
Revaluation of liability for put option on non- controlling
interests
|
-
|
|
|
-
|
|
|
-
|
|
1,501
|
|
|
1,501
|
|
Issuance of shares (net of issuance cost)
|
184
|
|
|
175,166
|
|
|
-
|
|
-
|
|
|
175,350
|
|
Own shares acquired
|
(41
|
)
|
|
(24,696
|
)
|
|
-
|
|
-
|
|
|
(24,737
|
)
|
Share based compensation
|
-
|
|
|
16,042
|
|
|
-
|
|
-
|
|
|
16,042
|
|
Exercise of share options
|
10
|
|
|
1,814
|
|
|
-
|
|
-
|
|
|
1,824
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2019
|
351
|
|
|
240,989
|
|
|
494
|
|
58,778
|
|
|
300,612
|
|
Total Comprehensive income for the year
|
|
|
|
|
|
|
|
|
|
Profit for the year
|
-
|
|
|
-
|
|
|
-
|
|
2,139
|
|
|
2,139
|
|
Other comprehensive Income:
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
|
-
|
|
|
-
|
|
|
2,836
|
|
-
|
|
|
2,836
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year
|
-
|
|
|
-
|
|
|
2,836
|
|
2,139
|
|
|
4,975
|
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners, recognized directly in
equity
|
|
|
|
|
|
|
|
|
|
Issuance of shares in a Business Combination
|
25
|
|
|
14,092
|
|
|
-
|
|
-
|
|
|
14,117
|
|
Revaluation of liability for put option on non- controlling
interests
|
-
|
|
|
-
|
|
|
-
|
|
(445
|
)
|
|
(445
|
)
|
Own shares acquired
|
(15
|
)
|
|
(9,950
|
)
|
|
-
|
|
-
|
|
|
(9,965
|
)
|
Share based compensation
|
-
|
|
|
18,770
|
|
|
-
|
|
-
|
|
|
18,770
|
|
Exercise of share options
|
19
|
|
|
930
|
|
|
-
|
|
-
|
|
|
949
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31,
2020
|
380
|
|
|
264,831
|
|
|
3,330
|
|
60,472
|
|
|
329,013
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
TREMOR INTERNATIONAL LTD.CONSOLIDATED
STATEMENTS OF CHANGES IN EQUITY
(Cont.)
(Unaudited)
|
|
|
Sharecapital
|
|
Sharepremium
|
|
Othercomprehensive income
|
|
RetainedEarnings
|
|
Total
|
|
USD thousands
|
|
|
|
|
|
|
|
|
|
|
Total Comprehensive Income for the year
|
|
|
|
|
|
|
|
|
|
Profit for the year
|
-
|
|
|
-
|
|
|
-
|
|
|
73,223
|
|
73,223
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
Foreign Currency Translation
|
-
|
|
|
-
|
|
|
(2,632
|
)
|
|
-
|
|
(2,632
|
)
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive Income for the year
|
-
|
|
|
-
|
|
|
(2,632
|
)
|
|
73,223
|
|
70,591
|
|
|
|
|
|
|
|
|
|
|
|
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 compensation
|
-
|
|
|
41,822
|
|
|
-
|
|
|
-
|
|
41,822
|
|
Exercise of share options
|
17
|
|
|
1,353
|
|
|
-
|
|
|
-
|
|
1,370
|
|
Issuance of shares
|
47
|
|
|
136,111
|
|
|
-
|
|
|
-
|
|
136,158
|
|
Issuance of Restricted shares
|
1
|
|
|
(1
|
)
|
|
-
|
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31,
2021
|
442
|
|
|
437,476
|
|
|
698
|
|
|
133,759
|
|
572,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
TREMOR INTERNATIONAL LTD.CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
Year ended December 31
|
|
|
2021
|
|
2020
|
|
2019
|
|
|
USD thousands
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
Profit for the year
|
|
73,223
|
|
|
2,139
|
|
|
6,224
|
|
Adjustments for:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
40,259
|
|
|
45,187
|
|
|
32,359
|
|
Net financing expense (income)
|
|
2,023
|
|
|
1,310
|
|
|
(19
|
)
|
Loss on sale of fixed assets
|
|
-
|
|
|
3
|
|
|
11
|
|
Gain on leases change contracts
|
|
(377
|
)
|
|
(2,103
|
)
|
|
(2,705
|
)
|
Gain on sale of business unit
|
|
(982
|
)
|
|
(503
|
)
|
|
(700
|
)
|
Share-based compensation and restricted shares
|
|
42,818
|
|
|
14,490
|
|
|
15,809
|
|
Tax benefit
|
|
(948
|
)
|
|
(9,581
|
)
|
|
(2,636
|
)
|
Change in trade and other receivables
|
|
(11,676
|
)
|
|
(39,351
|
)
|
|
36,466
|
|
Change in trade and other payables
|
|
26,845
|
|
|
25,882
|
|
|
(34,203
|
)
|
Change in employee benefits
|
|
(69
|
)
|
|
(23
|
)
|
|
(290
|
)
|
Income taxes received
|
|
2,231
|
|
|
1,168
|
|
|
3,184
|
|
Income taxes paid
|
|
(3,185
|
)
|
|
2,855)
|
)
|
|
(8,089
|
)
|
Interest received
|
|
496
|
|
|
517
|
|
|
604
|
|
Interest paid
|
|
(570
|
)
|
|
(1,117
|
)
|
|
(942
|
)
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
170,088
|
|
|
35,163
|
|
|
45,073
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
Change in pledged deposits
|
|
(11
|
)
|
|
229
|
|
|
841
|
|
Leases Receipt
|
|
2,454
|
|
|
2,885
|
|
|
1,669
|
|
Repayment of long-term loans
|
|
-
|
|
|
817
|
|
|
-
|
|
Acquisition of fixed assets
|
|
(3,378
|
)
|
|
(594
|
)
|
|
(1,063
|
)
|
Acquisition and capitalization of intangible assets
|
|
(4,966
|
)
|
|
(4,858
|
)
|
|
(5,672
|
)
|
Proceeds from sale of intangible assets
|
|
-
|
|
|
-
|
|
|
6
|
|
Proceeds from sale of business unit
|
|
415
|
|
|
232
|
|
|
-
|
|
Increase in bank deposit, net
|
|
-
|
|
|
-
|
|
|
(57
|
)
|
Acquisition of subsidiaries, net of cash acquired
|
|
(11,001
|
)
|
|
6,208
|
|
|
23,714
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
(16,487
|
)
|
|
4,919
|
|
|
19,438
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
Repayment of loans
|
|
-
|
|
|
-
|
|
|
(17,273
|
)
|
Acquisition of own shares
|
|
(6,643
|
)
|
|
(9,965
|
)
|
|
(24,737
|
)
|
Proceeds from exercise of share options
|
|
1,370
|
|
|
949
|
|
|
1,824
|
|
Leases repayment
|
|
(10,009
|
)
|
|
(13,351
|
)
|
|
(12,607
|
)
|
Issuance of shares, net of issuance cost
|
|
134,558
|
|
|
-
|
|
|
-
|
|
Payment of financial liability
|
|
(2,414
|
)
|
|
-
|
|
|
-
|
|
Net cash provided by (used in) financing activities
|
|
116,862
|
|
|
(22,367
|
)
|
|
(52,793
|
)
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
270,463
|
|
|
17,715
|
|
|
11,718
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AS OF THE BEGINNING OF
YEAR
|
|
97,463
|
|
|
79,047
|
|
|
67,073
|
|
EFFECT OF EXCHANGE RATE FLUCTUATIONS ON CASH AND CASH
EQUIVALENTS
|
|
(209
|
)
|
|
701
|
|
|
256
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AS OF THE END OF
YEAR
|
|
367,717
|
|
|
97,463
|
|
|
79,047
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
TREMOR INTERNATIONAL
LTD.NOTES TO CONSOLIDATED 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 Company are listed on
the AIM Market of the London Stock Exchange and the American
Depositary Shares ("ADSs"), each of which represents two ordinary
shares of the Company, represented by the American Depositary
Receipts ("ADR") are listed on the Nasdaq Capital Market (see Note
1d). The address of the registered office is 82 Yigal Alon Street
Tel-Aviv, 6789124, Israel.
Tremor International is a global Company
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. Unruly
Group, LLC (Former name RhythmOne, LLC), provides 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.
b. 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. As a result of
those acquisitions and their influence on the Company’s operation
and other changes in the industry practice, the Company has changed
revenue presentation as of 2020 to a net basis with respect to its
programmatic activity.c. The global spread of
COVID-19, which was declared a global pandemic by the World Health
Organization in March 2020, has created significant volatility,
global macro-economic uncertainty, and disruption in the business
and financial markets. The COVID-19 pandemic and efforts to control
its spread have curtailed the movement of people, goods, and
services worldwide, including in the regions in which we and our
customers and partners operate, and are impacting economic activity
and financial markets. The spread of the COVID-19 pandemic has
resulted in, regional quarantines, labor shortages or stoppages,
changes in consumer purchasing patterns, and overall economic
instability.NOTE 1:
GENERAL
(Cont.)
The Company has introduced a number of measures
to mitigate the impact of COVID-and continues to monitor and assess
the impact of the COVID pandemic on its operation, its customers
and potential customers.
d. Material events in
the reporting period:
1. On March 25, 2021, the Company paid USD 1,294
thousand to ADI founders for its exercised part of the call
option, a lower amount than was originally scheduled. 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 owns through its subsidiary 100% of the share
capital of ADI.2. On June 22, 2021, the Company completed its
initial public offering in the U.S. of 6,768,953 American
Depositary Shares ("ADSs"), at a public offering price of USD
19.00 per ADS, for aggregate proceeds of USD 128.6 million
before deducting underwriting discounts and commissions (the
“Nasdaq IPO”). Each ADS represents two Ordinary Shares of the
Company. The ADSs began trading on the Nasdaq Global Market on June
18, 2021, under the ticker symbol “TRMR”. The Company also
granted the underwriters of the Nasdaq IPO a 30-day option to
purchase additional up to 1,015,342 ADSs from the Company
at the initial public offering price of USD 19.00 per
ADS, which the underwriters subsequently exercised in full on July
15, 2021, for total additional consideration of USD 19.3 million in
gross proceeds to the Company before deducting underwriting
discounts and commissions.3. Effective upon completion of the
Nasdaq IPO, on June 22, 2021, the Company granted an aggregate of
4,725,000 Restricted Share Units (“RSUs”) and 2,025,000 Performance
Share Units (“PSUs”) to its three Executive Directors, pursuant to
the terms of the Company’s 2017 Equity Incentive Plan and the
Company’s Global Share Incentive Plan (2011). The grant of the RSUs
and PSUs awards was approved by the Company’s shareholders on April
30, 2021 (subject to the completion of the Nasdaq IPO). The RSU
awards 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 a Company on the applicable vesting
date. The PSU awards 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 a Company on the applicable
vesting date, and (ii) compliance with performance-based metrics
determined by the Compensation Committee of the Board of Directors
of the Company.The fair value of each RSU and PSU granted to the
Executive Directors as of April 30, 2021, is 720 pence
(approximately USD 10.02) per Ordinary Share, based on the market
value of the Company’s quoted Ordinary Shares on AIM.
NOTE 1:
GENERAL
(Cont.)
The estimated aggregated cost of the 4,725,000
RSUs and 2,025,000 PSUs awards, assuming 100% vesting, will be
approximately USD 67 million over the three-year vesting period
commencing June 22, 2021.
In addition, effective upon completion of the
Nasdaq IPO on June 22, 2021, the Company’s three Executive
Directors are entitled to a special bonus in recognition for their
special contribution to the completion of the Nasdaq IPO in the
amount of USD 500,000, as approved by the Company’s shareholders on
April 30, 2021 (subject to the completion of the Nasdaq IPO). The
special bonuses payable to the Executive Directors were part of an
aggregate USD 2.9 million special bonus for the Company executives
and employees, as approved and allocated by the Company’s Board of
Directors (out of an aggregate USD 5 million that was initially
approved). On April 22, 2021, the Company’s shareholders
approved an increase of 6,500,000 Ordinary Shares to the aggregate
available pool of the Company’s 2017 Equity Incentive Plan and the
Company’s Global Share Incentive Plan (2011) (with 80% of the
increase allocated to the 2017 Plan and 20% of the increase
allocated to the 2011 Plan).
4. On October 18, 2021, the
Company completed the acquisition of SpearAd (the "
SpearAd") (See Note 20).SpearAd's ad server technology will be
integrated into Tremor's Unruly SSP, enabling CTV header
bidding, channel inventory and ad pod
management - complementing the Company's
existing robust end-to-end technology stack, which also
includes the Tremor Video DSP.
e.
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 Unruly Group LLC, 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
consolidated financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board ("IASB").
The consolidated financial statements were
authorized for issue by the Company’s Board of Directors on
February 24, 2022.
b. Functional and
presentation currency:These consolidated financial
statements are presented in US Dollars (USD), which is the
Company’s functional currency, and have been rounded to the nearest
thousand, except when otherwise indicated. The USD is the currency
that represents the principal economic environment in which the
Company operates.
c. Basis of
measurement:The consolidated financial statements have
been prepared on a historical cost basis except for the following
assets and liabilities:
- Deferred and current tax assets and liabilities
- Put option to non-controlling interests
- Provisions
- Derivatives
For further information regarding the
measurement of these assets and liabilities see Note 3 regarding
significant accounting policies.
d. 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 2:
BASIS OF
PREPARATION (Cont.)
Information about assumptions made by the Group
with respect to the future and other reasons for uncertainty with
respect to estimates that have a significant risk of resulting in a
material adjustment to carrying amounts of assets and liabilities
in the next financial year are included in Note 6, on leases, with
respect to determining the lease term and determining the discount
rate of a lease liability, in Note 7, on intangible assets, with
respect to the accounting of software development capitalization,
in Note 4, on Income Tax, with respect to uncertain tax position
and Note 20, on subsidiaries, with respect to business
combinations.
e. Determination of
fair value:
Preparation of the financial statements requires
the Group to determine the fair value of certain assets and
liabilities. When determining the fair value of an asset or
liability, the Group uses observable market data as much as
possible. There are three levels of fair value measurements in the
fair value hierarchy that are based on the data used in the
measurement, as follows:
- Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities.
- Level 2: inputs other than quoted prices included within Level
1 that are observable, either directly or indirectly.
- Level 3: inputs that are not based on observable market data
(unobservable inputs).
Further information about the assumptions that
were used to determine fair value is included in the following
notes:
- Note 17, on share-based compensation;
- Note 18, on financial instruments; and
- Note 20, on subsidiaries (regarding business
combinations).
f. Correction of
immaterial error
The Group corrected an immaterial error as of
December 31, 2020 by presenting deferred tax liabilities net from
deferred tax assets.
The change did not have any effect on the profit
for the year ended December 31, 2020.
NOTE 3:
SIGNIFICANT
ACCOUNTING POLICIES
The accounting policies set out below have been
applied consistently for all periods presented in these
consolidated financial statements and have been applied
consistently by Group entities.
a. Basis of consolidation:1)
Business combinations:The Group implements the acquisition method
to all business combinations. The acquisition date is the date on
which the acquirer obtains control over the acquiree. Control
exists when the Group is exposed, or has rights, to variable
returns from its involvement with the acquiree and it has the
ability to affect those returns through its power over the
acquiree. Substantive rights held by the Group and others are taken
into account when assessing control.
The Group recognizes goodwill on acquisition
according to the fair value of the consideration transferred less
the net amount of the identifiable assets acquired and the
liabilities assumed.
The consideration transferred includes the fair
value of the assets transferred to the previous owners of the
acquiree, the liabilities incurred by the acquirer to the previous
owners of the acquiree and equity instruments that were issued by
the Group. In addition, the consideration transferred includes the
fair value of any contingent consideration. After the acquisition
date, the Group recognizes changes in the fair value of contingent
consideration classified as a financial liability in profit or
loss.
If share-basedcompensationawards (replacement
awards) are required to be exchanged for awards held by the
acquiree’s employees (acquiree’s awards) and relate to past
services, then all or a portion of the amount of the acquirer’s
replacement awards is included in measuring the consideration
transferred in the business combination. This determination is
based on the market-based value of the replacement awards compared
with the market-based value of the acquiree’s awards and the extent
to which the replacement awards relate to past and/or future
service. The unvested portion of the replacement award that is
attributed to post-acquisition services is recognized as a
compensation cost following the business combination.
Costs associated with the acquisitions that were
incurred by the acquirer in the business combination such as:
finder’s fees, advisory, legal, valuation and other professional or
consulting fees are expensed in the period the services are
received.
2) Subsidiaries:Subsidiaries are entities
controlled by the Group. The financial statements of the
subsidiaries are included in the consolidated financial statements
from the date that control commenced, until the date that control
is lost.
NOTE 3:
SIGNIFICANT
ACCOUNTING POLICIES (Cont.)
3) Transactions eliminated on
consolidation:Intra-group balances and transactions, and any
unrealized income and expenses arising from intra-group
transactions, are eliminated in preparing the consolidated
financial statements.
4) Issuance of put option to non-controlling
interests:A put option issued by the Company to non-controlling
interests that is settled in cash is recognized as a liability at
the present value of the exercise price under the anticipated
acquisition method. In subsequent periods, the Group elected to
account for the changes in the value of the liability in respect of
put options in Equity.
Accordingly, the Group’s share of a subsidiary’s
profits includes the share of the non-controlling interests to
which the Group issued a put option.
b. Foreign
currency:1) Foreign currency transactions:Transactions in
foreign currencies are translated to the respective functional
currencies of the Group at exchange rates at the dates of the
transactions. Monetary assets and liabilities denominated in
foreign currencies at the reporting date are translated into the
functional currency at the exchange rate on that date. The foreign
currency gain or loss on monetary items is the difference between
amortized cost in the functional currency at the beginning of the
year, adjusted for effective interest and payments during the year,
and the amortized cost in foreign currency translated at the
exchange rate as of the end of the year.
Non-monetary assets and liabilities denominated
in foreign currencies that are measured at fair value are
retranslated to the functional currency at the exchange rate on the
date that the fair value was determined. Non-monetary items that
are measured in terms of historical cost in a foreign currency are
translated using the exchange rate on the date of the
transaction.
2) Foreign operations:The assets and liabilities
of foreign operations, including goodwill and fair value
adjustments arising on acquisition, are translated to USD at
exchange rates at the reporting date. The income and expenses of
foreign operations are translated to USD at exchange rates at the
dates of the transactions.
Foreign currency differences are recognized in
other comprehensive income and are presented in equity.
NOTE 3:
SIGNIFICANT
ACCOUNTING POLICIES (Cont.)
c. Financial instruments:1)
Non-derivative financial assetsInitial recognition and
measurement of financial assets
The Group initially recognizes trade receivables
and debt instruments issued on the date that they are created. All
other financial assets are recognized initially on the trade date
at which the Group becomes a party to the contractual provisions of
the instrument. A financial asset is initially measured at fair
value plus transaction costs that are directly attributable to the
acquisition or issuance of the financial asset. A trade receivable
without a significant financing component is initially measured at
the transaction price. Receivables originating from contract assets
are initially measured at the carrying amount of the contract
assets on the date classification was changed from contract asset
to receivables.
Derecognition of financial
assets
Financial assets are derecognized when the
contractual rights of the Group to the cash flows from the asset
expire, or the Group transfers the rights to receive the
contractual cash flows on the financial asset in a transaction in
which substantially all the risks and rewards of ownership of the
financial asset are transferred. When the Group retains
substantially all of the risks and rewards of ownership of the
financial asset, it continues to recognize the financial asset.
Classification of financial assets into
categories and the accounting treatment of each
category
Financial assets are classified at initial
recognition to one of the following measurement categories:
amortized cost; fair value through other comprehensive income –
investments in debt instruments; fair value through other
comprehensive income – investments in equity instruments; or fair
value through profit or loss.
Financial assets are not reclassified in
subsequent periods unless, and only if, the Group changes its
business model for the management of financial debt assets, in
which case the affected financial debt assets are reclassified at
the beginning of the period following the change in the business
model.
The Group has balances of trade and other
receivables and deposits that are held within a business model
whose objective is collecting contractual cash flows. The
contractual cash flows of these financial assets represent solely
payments of principal and interest that reflects consideration for
the time value of money and the credit risk. Accordingly, these
financial assets are measured at amortized cost.
NOTE 3:
SIGNIFICANT
ACCOUNTING POLICIES (Cont.)
Subsequent measurement and gains and
losses
Financial assets at amortized cost
These assets are subsequently measured at
amortized cost using the effective interest method. The amortized
cost is reduced by impairment losses. Interest income, foreign
exchange gains and losses and impairment are recognized in profit
or loss. Any gain or loss on derecognition is recognized in profit
or loss.
2) Non-derivative financial
liabilitiesNon-derivative financial liabilities include trade and
other payables.
Initial recognition of financial
liabilities
The Group initially recognizes debt securities
issued on the date that they originated. All other financial
liabilities are recognized initially on the trade date at which the
Group becomes a party to the contractual provisions of the
instrument.
Subsequent measurement of financial
liabilities
Financial liabilities (other than financial
liabilities at fair value through profit or loss) are recognized
initially at fair value less any directly attributable transaction
costs. Subsequent to initial recognition these financial
liabilities are measured at amortized cost using the effective
interest method. Financial liabilities are designated at fair value
through profit or loss if the Group manages such liabilities and
their performance is assessed based on their fair value in
accordance with the Group’s documented risk management strategy,
providing that the designation is intended to prevent an accounting
mismatch, or the liability is a combined instrument including an
embedded derivative.
Transaction costs directly attributable to an
expected issuance of an instrument that will be classified as a
financial liability are recognized as an asset in the framework of
deferred expenses in the statement of financial position. These
transaction costs are deducted from the financial liability upon
its initial recognition or are amortized as financing expenses in
the statement of income when the issuance is no longer expected to
occur.
Derecognition of financial
liabilities
Financial liabilities are derecognized when the
obligation of the Group, as specified in the agreement, expires or
when it is discharged or cancelled.
Offset of financial
instruments
Financial assets and liabilities are offset, and
the net amount presented in the statement of financial position
when, and only when, the Group currently has a legal right to
offset the amounts and intends either to settle on a net basis or
to realize the asset and settle the liability simultaneously.
NOTE 3:
SIGNIFICANT
ACCOUNTING POLICIES (Cont.)
3) Derivative financial
instruments:Economic hedges
Hedge accounting is not applied to derivative
instruments that economically hedge financial assets and
liabilities denominated in foreign currencies. Changes in the fair
value of such derivatives are recognized in profit or loss under
financing income or expenses.
4) Share capital:Ordinary
shares
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of ordinary
shares and share options are recognized as a deduction from equity,
net of any tax effects.Incremental costs directly attributable to
an expected issuance of an instrument that will be classified as an
equity instrument are recognized as an asset in deferred expenses
in the statement of financial position. The costs are deducted from
equity upon the initial recognition of the equity instruments or
are amortized as financing expenses in the statement of income when
the issuance is no longer expected to take place.
Treasury shares
When share capital recognized as equity is
repurchased by the Group, the amount of the consideration paid,
which includes directly attributable costs, net of any tax effects,
is recognized as a deduction from equity. Repurchased shares are
classified as a deduction in Share Premium. When treasury shares
are sold or reissued subsequently, the amount received is
recognized as an increase in equity, and the resulting surplus on
the transaction is carried to share premium, whereas a deficit on
the transaction is deducted from retained earnings.
d. Fixed
Assets:
Fixed assets are measured at cost less
accumulated depreciation. The cost of fixed assets includes
expenditure that is directly attributable to the acquisition of the
asset. Depreciation is provided on all property and equipment at
rates calculated to write each asset down to its residual value
(assumed to be nil), using the straight-line method, over its
expected useful life as follows:
|
Years
|
Computers and servers
|
3
|
Office furniture and equipment
|
3-17
|
Leasehold improvements
|
The shorter of the lease term and the useful life
|
An asset is depreciated from the date it is
ready for use, meaning the date it reaches the location and
condition required for it to operate in the manner intended by
management.
Depreciation methods, useful lives and residual
values are reviewed at the end of each reporting year and adjusted
if appropriate.NOTE 3:
SIGNIFICANT
ACCOUNTING POLICIES (Cont.)
e. Intangible
assets:1) Software development:Expenditure on research
activities, undertaken with the prospect of gaining new scientific
or technical knowledge and understanding, is recognized in profit
or loss when incurred.
Development activities involve a plan or design
for the production of new or substantially improved products and
processes. Development expenditure is capitalized only if
development costs can be measured reliably, the product or process
is technically and commercially feasible, future economic benefits
are probable, and the Group has the intention and sufficient
resources to complete development and to use or sell the asset. The
expenditure capitalized in respect of development activities
includes the cost of materials, direct labor and overhead costs
that are directly attributable to preparing the asset for its
intended use, and capitalized borrowing costs. Other development
expenditure is recognized in profit or loss as incurred.
In subsequent periods, capitalized development
expenditure is measured at cost less accumulated amortization and
accumulated impairment losses.
Where these criteria are not met, development
costs are charged to the statement of operation and other
comprehensive income as incurred.
The estimated useful lives of developed software
are three years.
Amortization methods, useful lives and residual
values are reviewed at the end of each reporting year and adjusted
if appropriate.
2) Acquired software:Acquired software licenses
are capitalized on the basis of the costs incurred to acquire and
bring to use the specific software licenses. These costs are
amortized over their estimated useful lives (3 years) using the
straight-line method. Costs associated with maintaining software
programs are recognized as an expense as incurred.
3) Goodwill:Goodwill that arises upon the
acquisition of subsidiaries is presented as part of intangible
assets. For information on measurement of goodwill at initial
recognition, see Note 3a(1).
In subsequent periods goodwill is measured at
cost less accumulated impairment losses. The Group has identified
its entire operation as a single cash generating unit (CGU).
According to management assessment and quoted price of the shares
as of December 31, 2021, no impairment in respect to goodwill has
been recorded.
NOTE 3:
SIGNIFICANT
ACCOUNTING POLICIES (Cont.)
4) Other intangible assets:Other intangible
assets that are acquired by the Group, which have finite useful
lives, are measured at cost less accumulated amortization and
accumulated impairment losses.
5) Amortization:Amortization is a systematic
allocation of the amortizable amount of an intangible asset over
its useful life. The amortizable amount is the cost of the asset
less its accumulated residual value.
Internally generated intangible assets, such as
software development costs, are not systematically amortized as
long as they are not available for use, i.e., they are not yet on
site or in working condition for their intended use. Goodwill is
not systematically amortized as well but is tested for impairment
at least once a year.
The Group examines the amortization methods,
useful life and accumulated residual values of its intangible
assets at least once a year (usually at the end of each reporting
period) in order to determine whether events and circumstances
continue to support the decision that the intangible asset has an
indefinite useful life.
Amortization is recognized in the statements of
other comprehensive income on a straight-line basis over the
estimated useful lives of the intangible assets from the date they
are available for use, since this method most closely reflects the
expected pattern of consumption of the future economic benefits
embodied in each asset, such as development costs, are tested for
impairment at least once a year until such date as they are
available for use.
The estimated useful lives for the current and
comparative periods are as follows:
Trademarks
|
1.75-5 years
|
Software (developed and acquired)
|
3 years
|
Customer relationships
|
3-5.75 years
|
Technology
|
1-5.25 years
|
Others
|
1-1.5 years
|
Amortization methods, useful lives and residual
values are reviewed at the end of each reporting year and adjusted
if appropriate.
During 2020, the Company changed the expected
useful life of intangible asset items. For further information see
Note 7 regarding the basis of preparation of the financial
statements.
NOTE 3:
SIGNIFICANT
ACCOUNTING POLICIES (Cont.)
f.
Impairment:Non-derivative financial
assets
Financial assets, contract assets and
lease receivables
The Group recognizes a provision for expected
credit losses in respect of:
- Financial assets at amortized cost;- Lease
receivables.
The Group has elected to measure the provision
for expected credit losses in respect of financial assets and lease
receivables at an amount equal to the full lifetime credit losses
of the instrument.
When determining whether the credit risk of a
financial asset has increased significantly since initial
recognition, and when estimating expected credit losses, the Group
considers reasonable and supportable information that is relevant
and available. Such information includes quantitative and
qualitative information, and an analysis, based on the Group’s past
experience and informed credit assessment, and it includes forward
looking information.
Measurement of expected credit
losses
Expected credit losses are a
probability-weighted estimate of credit losses. Credit losses are
measured as the present value of the difference between the cash
flows due to the Group in accordance with the contract and the cash
flows that the Group expects to receive.With respect to other debt
assets, the Group measures the provision for expected credit losses
at an amount equal to the full lifetime expected credit losses,
other than the provisions hereunder that are measured at an amount
equal to the 12-month expected credit losses:
- Debt instruments that are determined to have
low credit risk at the reporting date; and- Other debt instruments
and deposits, for which credit risk has not increased significantly
since initial recognition.
Presentation of provision for expected
credit losses in the statement of financial position
Provisions for expected credit losses of
financial assets measured at amortized cost and are deducted from
the gross carrying amount of the financial assets.
Write-off
The gross carrying amount of a financial asset
is written off when the Group does not have reasonable expectations
of recovering a financial asset at its entirety or a portion
thereof. This is usually the case when the Group determines that
the debtor does not have assets or sources of income that may
generate sufficient cash flows for paying the amounts being written
off. However, financial assets that are written off could still be
subject to enforcement activities in order to comply with the
Group's procedures for recovery of amounts due. Write-off
constitutes a de-recognition event.
NOTE 3:
SIGNIFICANT
ACCOUNTING POLICIES (Cont.)
g. Impairment of non-financial
assets:Non-financial assets that are subject to
amortization are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognized for the amount by
which an asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less
costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there
are separately identifiable cash flows (cash-generating
units).Non-financial assets that were subject to impairment are
reviewed for possible reversal of the impairment recognized in
respect thereof at each financial reporting date.
h. Restricted
Cash and
Deposit:The Company classifies certain restricted
cash and deposit balances within other current assets on the
consolidated statement of financial position based upon the term of
the remaining restrictions. On December 31, 2021, and 2020 the
Company had restricted cash and deposit of USD 2,061 thousand and
USD 49 thousand, respectively.
i. Share Based
Compensation:Compensation expense related to stock
options, restricted stock units and performance stock units. The
Company’s employee stock purchase plan is measured and recognized
in the consolidated financial statements based on the fair value of
the awards granted. The fair value of each option award is
estimated on the grant date using the Black-Scholes option-pricing
model. Stock-based compensation expense related to stock options
and restricted stock is recognized over the requisite service
periods of the awards.Determining the fair value of stock options
awards requires judgment. The Company’s use of the Black-Scholes
option pricing model requires the input of subjective assumptions.
The assumptions used in the Company’s option-pricing model
represent management’s best estimates. These estimates involve
inherent uncertainties and the application of management’s
judgment.
These assumptions and estimates are as
follows:
Risk-Free Interest Rate. The risk-free interest
rate is based on the yields of U.S. Treasury securities with
maturities approximating the expected term of the awards.
Expected Term. The expected term of an award is
calculated based on the vesting date and the expiration date of the
award.
Volatility. The Company determined the price
volatility based on daily price observations over a period
equivalent to the expected term of the award.
Dividend Yield. The dividend yield assumption is
based on the Company’s history and current expectations of dividend
payouts.
Fair Value of Common Stock. The fair value of
common stock is based on the closing price of the Company's common
stock on the grant date
NOTE 3:
SIGNIFICANT
ACCOUNTING POLICIES (Cont.)
j. Employee
benefits:1) Post-employment benefits:The Group’s main
post-employment benefit plan is under section 14 to the Severance
Pay Law ("Section 14"), which is accounted for as a defined
contribution plan. In addition, for certain employees, the Group
has an additional immaterial plan that is accounted for as a
defined benefit plan. These plans are usually financed by deposits
with insurance companies or with funds managed by a trustee.
a) Defined contribution plans:A defined
contribution plan is a post-employment benefit plan under which an
entity pays fixed contributions into a separate entity and has no
legal or constructive obligation to pay further amounts.
Obligations for contributions to defined contribution pension plans
are recognized as an expense in the statement of comprehensive
income in the periods during which related services are rendered by
employees.
According to Section 14, the payment of monthly
deposits by a Company into recognized severance and pension funds
or insurance policies releases it from any additional severance
obligation to the employees that have entered into agreements with
the Company pursuant to such Section 14. The Company has entered
into agreements with a majority of its employees in order to
implement Section 14 and as such, no additional liability with
respect to such employees exist.
b) Defined benefit plans:A defined benefit plan
is a post-employment benefit plan other than a defined contribution
plan. The Group’s net obligation in respect of defined benefit
pension plans is calculated separately for each plan by estimating
the amount of future benefit that employees have earned in return
for their service in the current and prior periods. That benefit is
discounted to determine its present value, and the fair value of
any plan assets is deducted. The Group determines the net interest
expense (income) on the net defined benefit liability (asset) for
the period by applying the discount rate used to measure the
defined benefit obligation at the beginning of the annual period to
the then-net defined benefit liability (asset).
2) Short-term benefits:Short-term employee
benefit obligations are measured on an undiscounted basis and are
expensed as the related service is provided or upon the actual
absence of the employee when the benefit is not accumulated (such
as maternity leave).
A liability is recognized for the amount
expected to be paid under short-term cash bonus or profit-sharing
plans if the Group has a present legal or constructive obligation
to pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.
NOTE 3:
SIGNIFICANT
ACCOUNTING POLICIES (Cont.)
The employee benefits are classified, for
measurement purposes, as short-term benefits or as other long-term
benefits depending on when the Group expects the benefits to be
wholly settled.
k. Revenue
recognition:The Company recognizes revenue through the
following five-step model:
(1) Identifying the contract with customer.(2)
Identifying distinct performance obligations in the contract.(3)
Determining the transaction price.(4) Allocating the transaction
price to distinct performance obligations.(5) Recognizing revenue
when the performance obligations are satisfied.
The Company generates revenue from transactions
where it provides access to a platform for the purchase and sale of
digital advertising inventory.
Its customers are both ad buyers, including
brands and agencies, and digital publishers.
The Company generates revenue through platform
fees that are tailored to fit the customer’s specific utilization
of its solutions and include: (i) a percentage of spend, (ii) flat
fees and (iii) fixed costs per mile (“CPM”). CPM refers to a
payment option in which customers pay a price for every 1,000
impressions an advertisement receives.
The Company maintains agreements with each
publisher and buyer in the form of written service agreements,
which set out the terms of the relationship, including payment
terms and access to the Company’s platform.
Publishers provide digital advertising inventory
to the Company’s platform in the form of advertising requests, or
ad request. When the Company receives ad requests from a publisher,
it send bid requests to buyers, which enable buyers to bid on
sellers’ digital advertising inventory according to a predefined
set of parameters (e.g., demographics, intent, location, etc.).
Winning bids create advertising, or paid impressions, for the
publisher to present to the buyers.
The Company generates revenue from its
Programmatic and Performance activities. Programmatic revenue is
derived from the end-to-end platform of programmatic advertising,
which uses software and algorithms to match buyers and sellers of
digital advertising in a technology-driven marketplace. Performance
revenue is derived from non-core activities, consisting of
mobile-based activities that help brands reach their users.
NOTE 3:
SIGNIFICANT
ACCOUNTING POLICIES (Cont.)
Till the acquisitions of RhythmOne and its
integration into the Company and the acquisition of Unruly in the
beginning of 2020 (i.e. for the year ended December 31, 2019), the
Company determined that it operated as a principal with respect to
its Programmatic activity and therefore presented revenue on a
gross basis mainly as: (i) the Company operated predominantly
through a DSP platform prior to the acquisition and full
integration of RhythmOne, (ii) the Company was highly involved in
execution of the process, which required certain manual operations
by Company employees and (iii) the Company determined that it had
an implicit obligation to provide credits and inducements to
customers to encourage use of the platform. That is, the Company
determined, on this basis, that it had an implicit obligation to
provide advertising space to customers, even though the contractual
terms and conditions (including its Master Service Agreements (MSA)
and Insertion Order (I/O)) do not explicitly state that the Company
is obliged to deliver customers an applicable advertising space or
to provide inducements to the customer. Consequently, the Company
concluded that it was the primarily responsible for fulfillment of
the contract.
Following the full integration with RhythmOne
and the acquisition of Unruly in 2020, the Company positions itself
as a stronger digital advertising platform in the marketplace with
an integrated, end-to-end platform connecting the DSP and SSP sides
of the business in a unified platform. As a result, the Company has
changed its Programmatic business, tech stack, features, business
models and activity as follow: (i) The Company implemented a
material change in its tech stack and operations, offering new
services and features that increased automation across the
platform, significantly decreasing the need for Company employees
to manually operate the platform; and (ii) The Company decreased
significantly the level of credits and inducements offered to its
customers. The
Company further concluded that as a result of such change in its
Programmatic activity (i) it does not have manual control over the
process, (ii) the Company is not primarily responsible for
fulfillment, (iii) the Company has no inventory risk and (iv) the
Company obtains only momentary a title to the advertising space
offered via the end-to-end platform.
The Performance activity has not changed, and
the Company is still the primary obligor to provide the services
and, as such, revenue is presented on a gross basis for the
Performance activity. Management is focused on driving growth with
the Programmatic activity through the end-to-end platform, while
the Performance activity is declining over time.
The Company estimates and records reduction to
revenue for volume discounts based on expected volume during the
incentive term.
The Company generally invoices buyers at the end
of each month for the full purchase price of ad impressions
monetized in that month. Accounts receivables are recorded at the
amount of gross billings for the amount it is responsible to
collect and accounts payable are recorded at the net amount payable
to publishers. Accordingly, both accounts receivable and accounts
payable appear large in relation to revenue reported on a net
basis.
NOTE 3:
SIGNIFICANT
ACCOUNTING POLICIES (Cont.)
l. Classification of
expensesCost of revenue
Cost of revenue includes expenses related to
third-party hosting fees and the cost of data purchased from third
parties, traffic acquisition costs, data and hosting that are
directly attributable to revenue generated by the Company (see Note
12).
Research and development
Research and development expenses consist
primarily of compensation and related costs for personnel
responsible for the research and development of new and existing
products and services. Where required, development expenditures are
capitalized in accordance with the Company's standard internal
capitalized development policy in accordance with IAS 38 (also see
Note 3e(1)). All research costs are expensed when incurred.
Selling and marketing
Selling and marketing expenses consist primarily
of compensation and related costs for personnel engaged in customer
service, sales, and sales support functions, as well as advertising
and promotional expenditures.
General and administrative
General and administrative expenses consist
primarily of compensation and related costs for personnel, and
include costs related to the Company’s facilities, finance, human
resources, information technology, legal organizations and fees for
professional services. Professional services are principally
comprised of outside legal, and information technology consulting
and outsourcing services that are not directly related to other
operational expenses.
m. Financing income and
expenses:Financing income mainly comprises foreign
currency gains and interest income.Financing expenses comprises of
exchange rate differences, interest and bank fees, interest on
loans and other expenses.
Foreign currency gains and losses on financial
assets and financial liabilities are reported on a net basis as
either financing income or financing expenses depending on whether
foreign currency movements are in a net gain or net loss
position.
NOTE 3:
SIGNIFICANT
ACCOUNTING POLICIES (Cont.)
n. Income tax
expense:Income tax comprises current and deferred tax.
Current tax and deferred tax are recognized in the statement of
comprehensive income except to the extent that they relate to a
business combination.
Current taxes
Current tax is the expected tax payable (or
receivable) on the taxable income for the year, using tax rates
enacted or substantively enacted at the reporting date.
Deferred taxes
Deferred tax is recognized in respect of
temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used
for taxation purposes.
Deferred tax is not recognized for the following
temporary differences:
- The initial recognition of goodwill; and
- Differences relating to investments
in subsidiaries to the extent it is probable that they will not
reverse in the foreseeable future, either by way of selling the
investment or by way of distributing taxable dividends in respect
of the investment.
The measurement of deferred tax reflects the tax
consequences that would follow the manner in which the Group
expects, at the end of the reporting period, to recover or settle
the carrying amount of its assets and liabilities. Deferred tax is
measured at the tax rates that are expected to be applied to
temporary differences when they reverse, based on the laws that
have been enacted or substantively enacted by the reporting
date.
A deferred tax asset is recognized for tax
benefits and deductible temporary differences, to the extent that
it is probable that future taxable profits will be available
against which they can be utilized. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that
it is no longer probable that the related tax benefit will be
realized.
Offset of deferred tax assets and
liabilities
Deferred tax assets and liabilities are offset
if there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income taxes levied by
the same tax authority.
Uncertain tax positions
A provision for uncertain tax positions,
including additional tax and interest expenses, is recognized when
it is more probable than not that the Group will have to use its
economic resources to pay the obligation.
NOTE 3:
SIGNIFICANT
ACCOUNTING POLICIES (Cont.)
o.
Leases:Determining whether an arrangement
contains a lease
On the inception date of the lease, the Group
determines whether the arrangement is a lease or contains a lease,
while examining if it conveys the right to control the use of an
identified asset for a period of time in exchange for
consideration. In its assessment of whether an arrangement conveys
the right to control the use of an identified asset, the Group
assesses whether it has the following two rights throughout the
lease term:(a) The right to obtain substantially all the economic
benefits from use of the identified asset; and(b) The right to
direct the identified asset’s use.
For lease contracts that contain non-lease
components, such as services or maintenance, that are related to a
lease component, the Group elected to account for the contract as a
single lease component without separating the components.
Leased assets and lease
liabilities
Contracts that award the Group control over the
use of a leased asset for a period of time in exchange for
consideration, are accounted for as leases. Upon initial
recognition, the Group recognizes a liability at the present value
of the balance of future lease payments (these payments do not
include certain variable lease payments), and concurrently
recognizes a right-of-use asset at the same amount of the lease
liability, adjusted for any prepaid or accrued lease payments or
provision for impairment, plus initial direct costs incurred in
respect of the lease.
Since the interest rate implicit in the Group's
leases is not readily determinable, the incremental borrowing rate
of the lessee is used. Subsequent to initial recognition, the
right-of-use asset is accounted for using the cost model and
depreciated over the shorter of the lease term or useful life of
the asset.
The lease term
The lease term is the non-cancellable period of
the lease plus periods covered by an extension or termination
option if it is reasonably certain that the lessee will or will not
exercise the option, respectively.
Variable lease payments
Variable lease payments that depend on an index
or a rate, are initially measured using the index or rate existing
at the commencement of the lease and are included in the
measurement of the lease liability. When the cash flows of future
lease payments change as the result of a change in an index or a
rate, the balance of the liability is adjusted against the
right-of-use asset.
Other variable lease payments that are not
included in the measurement of the lease liability are recognized
in profit or loss in the period in which the event or condition
that triggers payment occurs.
NOTE 3:
SIGNIFICANT
ACCOUNTING POLICIES (Cont.)
Depreciation of right-of-use
asset
After lease commencement, a right-of-use asset
is measured on a cost basis less accumulated depreciation and
accumulated impairment losses and is adjusted for re-measurements
of the lease liability. Depreciation is calculated on a
straight-line basis over the useful life or contractual lease
period, whichever earlier, as follows:
•
Buildings |
1-8 years |
• Data centers |
1-3 years |
Reassessment of lease
liability
Upon the occurrence of a significant event or a
significant change in circumstances that is under the control of
the Group and had an effect on the decision whether it is
reasonably certain that the Group will exercise an option, which
was not included before in the lease term, or will not exercise an
option, which was previously included in the lease term, the Group
re-measures the lease liability according to the revised leased
payments using a new discount rate. The change in the carrying
amount of the liability is recognized against the right-of-use
asset, or recognized in profit or loss if the carrying amount of
the right-of-use asset was reduced to zero.
Lease modifications
When a lease modification increases the scope of
the lease by adding a right to use one or more underlying assets,
and the consideration for the lease increased by an amount
commensurate with the stand-alone price for the increase in scope
and any appropriate adjustments to that stand-alone price to
reflect the contract’s circumstances, the Group accounts for the
modification as a separate lease.
In all other cases, on the initial date of the
lease modification, the Group allocates the consideration in the
modified contract to the contract components, determines the
revised lease term and measures the lease liability by discounting
the revised lease payments using a revised discount rate.
For lease modifications that decrease the scope
of the lease, the Group recognizes a decrease in the carrying
amount of the right-of-use asset in order to reflect the partial or
full cancellation of the lease, and recognizes in profit or loss a
profit (or loss) that equals the difference between the decrease in
the right-of-use asset and re-measurement of the lease
liability.
For other lease modifications, the Group
re-measures the lease liability against the right-of-use asset.
Subleases
In leases where the Group subleases the
underlying asset, the Group examines whether the sublease is a
finance lease or operating lease with respect to the right-of-use
received from the head lease. The Group examined the subleases
existing on the date of initial application based on the remaining
contractual terms at that date.
NOTE 3:
SIGNIFICANT
ACCOUNTING POLICIES (Cont.)
p. Earnings per share:The Group
presents basic and diluted earnings per share (EPS) data for its
ordinary shares. Basic EPS is calculated by dividing the profit or
loss attributable to ordinary shareholders of the Company by the
weighted average number of ordinary shares outstanding during the
year, adjusted for treasury shares. Diluted EPS is determined by
adjusting the profit or loss attributable to ordinary shareholders
of the Company and the weighted average number of ordinary shares
outstanding, after adjustment for treasury shares, for the effects
of all dilutive potential ordinary shares, which comprise
restricted stock.
q. New standards, amendments to
standards and interpretations not yet adopted:
Amendment to IFRS 3, Business Combinations
The Amendment adds an exception to the principle
for recognizing liabilities in IFRS 3. According to the exception,
contingent liabilities are to be recognized according to the
requirements of IAS 37 and IFRIC 21 and not according to the
conceptual framework. The Amendment prevents differences in the
timing of recognizing liabilities that could have led to the
recognition of gains and losses immediately after the business
combination (day 2 gain or loss). The Amendment also clarifies that
contingent assets are not to be recognized on the date of the
business combination. The Amendment is effective for annual periods
beginning on or after January 1, 2022. The Company is examining the
effects of the Amendment on the financial statements with no plans
to early adopt.
NOTE 4:
INCOME
TAX
a. Details regarding the tax environment
of the Israeli company:1) Corporate tax rate
Taxable income of the Israeli parent is subject
to the Israeli corporate tax at the rate of 23% in the years 2021,
2020 and 2019.
2) Benefits under the Law for the Encouragement
of Capital Investments
The Investment Law provides tax benefits for
Israeli companies meeting certain requirements and criteria. The
Investment Law has undergone certain amendments and reforms in
recent years.The Israeli parliament enacted a reform to the
Investment Law, effective January 2011. According to the reform, a
flat rate tax applies to companies eligible for the “Preferred
Enterprise” status. In order to be eligible for Preferred
Enterprise status, a company must meet minimum requirements to
establish that it contributes to the country’s economic growth and
is a competitive factor for the gross domestic product.
NOTE 4:
INCOME
TAX (Cont.)
On December 22, 2016, the Knesset plenum passed
the Economic Efficiency Law (Legislative Amendments for Achieving
Budget Objectives in the Years 2017 and 2018) – 2016, by which the
Encouragement Law was also amended (hereinafter: “the Amendment”).
The Amendment added new tax benefit tracks for a “preferred
technological enterprise” and a “special preferred technological
enterprise” that awards reduced tax rates to a technological
industrial enterprise for the purpose of encouraging activity
relating to the development of qualifying intangible assets.
Preferred technological income that meets the
conditions required in the law, will be subject to a reduced
corporate tax rate of 12%, and if the preferred technological
enterprise is located in Development Area A to a tax rate of 7.5%.
The Amendment is effective as from January 1, 2017.
The Amendment also provides that no tax will
apply to a dividend distributed out of preferred income to a
shareholder that is an Israeli resident company. A tax rate of 20%
shall apply to a dividend distributed out of preferred income and
preferred technological income, to an individual shareholder or
foreign resident, subject to double taxation prevention
treaties.
On May 16, 2017, the Knesset Finance Committee
approved Encouragement of Capital Investment Regulations (Preferred
Technological Income and Capital Gain of Technological Enterprise)
– 2017 (hereinafter: “the Regulations”), which provides rules for
applying the “preferred technological enterprise” and “special
preferred technological enterprise” tax benefit tracks including
the Nexus formula that provides the mechanism for allocating the
technological income eligible for the benefits.
In June 2016, Taptica, a wholly owned
subsidiary, appealed for a tax ruling to apply "the preferred
enterprise" track, which was obtained in April 2017 and was applied
for the years 2016-2020.
On December 28, 2016, Taptica Social, a wholly
owned subsidiary, together with Taptica appealed for a tax ruling
for a restructuring, whereby Taptica Social will be merged with and
into Taptica in such a manner that Taptica Social will transfer to
Taptica all its assets and liabilities for no consideration and
thereafter will be liquidated. Accordingly, on June 6, 2017, the
merger between the companies was approved by the Israeli Tax
Authority and the effective merge date was determined as December
31, 2016. As a result of the merger, the ruling previously obtained
by Taptica regarding the preferred income required re- validation
from the Israeli tax authority. Therefore, Taptica appealed and
received on December 2018 re-validation from the Israeli tax
authority for the ruling which determines that Taptica owns an
industrial enterprise and Preferred Technological Enterprise as
defined in the Law for the Encouragement of Capital Investments –
1959. In addition, as a part of the re-validation of the ruling,
Taptica also obtained an amendment that includes the acquisition
and absorption of Tremor’s operation in the rulings and apply the
Law for the Encouragement of Capital Investments to this purchased
activity as well. The tax rulings which were obtained in December
2018 and were applied for the years 2017-2021.
NOTE 4:
INCOME
TAX (Cont.)
On December 3, 2018, the Company together with
Taptica submitted a request to the Israeli tax authorities for a
tax ruling regarding to restructuring, whereby Taptica will be
merged with and into the Company in such a manner that Taptica will
transfer to the Company all its assets and liabilities for no
consideration and thereafter will be liquidated. As of May 8, 2019,
the merger between the companies approved by the Israeli Tax
Authority and the effective merge date was determined as December
31, 2018. Following the approval of the restructuring, the tax
ruling regarding Taptica owns an industrial enterprise and
preferred technological enterprise which was obtained in December
2018 was applied on the merged Company for the years 2017-2021 with
relative agreed changes. As of beginning of 2022, the Company
approaches the Israeli Tax Authority, for the renewal of the tax
ruling, regarding industrial enterprise and preferred technological
enterprise, for the next five years.
b. Details regarding the tax environment
of the non-Israeli companies:Non-Israeli subsidiaries are
taxed according to the tax laws in their countries of residence as
reported in their statutory financial statement prepared under
local accounting regulations.
(1) US
As of the acquisition date of RhythmOne,
RhythmOne had U.S. federal net operating loss carryforwards, or
NOLs, of approximately USD 100.8 million, which will expire
starting 2038. As of December 31, 2021, the NOLs are approximately
USD 79.4 million (2020: USD 102 million).
Additionally, for tax years beginning after
December 31, 2017, the Tax Cuts and Jobs Act limits the NOL
deduction to 80% of taxable income, repeals carryback of all NOLs
arising in a tax year ending after 2017 and permits indefinite
carryforward for all such NOLs. NOL’s arising in a tax year ending
on or before 2017 can offset 100% of taxable income, are available
for carryback, and expire 20 years after they arise. It should be
noted that the Coronavirus Aid, Relief and Economic Security
(“CARES”) Act suspended the 80% limitation for tax years 2018, 2019
and 2020 and allowed for a 5-year carryback for NOLs for tax years
beginning after December 31, 2017, and before January 1, 2021.
Pursuant to Section 382 of the Internal Revenue
Code, RhythmOne underwent ownership changes for tax purposes (i.e.,
a change of more than 50% in stock ownership involving 5%
shareholders) on April 2, 2019. As a result, the use of the
Company’s total US NOL carryforwards and tax credits generated
prior to the ownership change is subject to annual use limitations
under Section 382 and potentially also under section 383 of the
Code and comparable state income tax laws.
(2) International
As of the acquisition date of Unruly, Unruly had
International NOLs of approximately USD 24 million. As of December
31, 2021, the NOLs are approximately USD 16.6 million (2020: USD
23.2 million).
NOTE 4:
INCOME
TAX (Cont.)
c. Composition of income
tax benefit:
|
|
Year endedDecember 31
|
|
|
2021
|
|
2020
|
|
2019
|
|
|
USD thousands
|
|
|
|
|
|
|
|
Current tax expense
|
|
|
|
|
|
|
Current year
|
|
7,220
|
|
|
3,022
|
|
|
4,571
|
|
|
|
|
|
|
|
|
Deferred tax (income)
|
|
|
|
|
|
|
Creation and reversal of temporary differences
|
|
(8,168
|
)
|
|
(12,603
|
)
|
|
(7,207
|
)
|
|
|
|
|
|
|
|
Tax benefit
|
|
(948
|
)
|
|
(9,581
|
)
|
|
(2,636
|
)
|
|
|
|
|
|
|
|
|
|
|
The following are the domestic and foreign
components of the Company’s income taxes (in thousands):
|
|
Year endedDecember 31
|
|
|
2021
|
|
|
2020
|
|
|
2019
|
|
|
|
USD thousands
|
|
|
|
|
|
|
|
Domestic
|
|
4,995
|
|
|
1,661
|
|
|
(639
|
)
|
US
|
|
(961
|
)
|
|
(5,646
|
)
|
|
(416
|
)
|
International
|
|
(4,982
|
)
|
|
(5,596
|
)
|
|
(1,581
|
)
|
|
|
|
|
|
|
|
Tax Benefit
|
|
(948
|
)
|
|
(9,581
|
)
|
|
(2,636
|
)
|
|
|
|
|
|
|
|
|
|
|
NOTE 4:
INCOME
TAX (Cont.)
d. Reconciliation between the
theoretical tax on the pre-tax profit and the tax
expense:
|
|
Year endedDecember 31
|
|
|
2021
|
|
2020
|
|
2019
|
|
|
USD thousands
|
|
|
|
|
|
|
|
Profit (Loss) before taxes on income
|
|
72,275
|
|
|
(7,442
|
)
|
|
3,588
|
|
|
|
|
|
|
|
|
Primary tax rate of the Company
|
|
23
|
%
|
|
23
|
%
|
|
23
|
%
|
|
|
|
|
|
|
|
Tax calculated according to the Company’s primary tax rate
|
|
16,623
|
|
|
(1,712
|
)
|
|
825
|
|
|
|
|
|
|
|
|
Additional tax (tax saving) in respect of:
|
|
|
|
|
|
|
Non-deductible expenses net of tax exempt income (*)
|
|
(6,218
|
)
|
|
(2,509
|
)
|
|
3,584
|
|
Effect of reduced tax rate on preferred income and differences
in previous tax assessments
|
|
(7,226
|
)
|
|
170
|
|
|
(1,433
|
)
|
Utilization of tax losses from prior years for which deferred
taxes were not created
|
|
(2,030
|
)
|
|
(5,887
|
)
|
|
(5,050
|
)
|
Effect on deferred taxes at a rate different from the primary
tax rate
|
|
(3,329
|
)
|
|
(768
|
)
|
|
(873
|
)
|
Foreign tax rate differential
|
|
1,232
|
|
|
1,125
|
|
|
311
|
|
|
|
|
|
|
|
|
Tax benefit
|
|
(948
|
)
|
|
(9,581
|
)
|
|
(2,636
|
)
|
|
|
|
|
|
|
|
Effective income tax rate
|
|
(1
|
%)
|
|
129
|
%
|
|
(73
|
%)
|
|
|
|
|
|
|
|
|
|
|
(*) including non- deductible share-based
compensation expenses.
NOTE 4:
INCOME
TAX (Cont.)
e. Deferred tax assets
and liabilities:
The tax effects of temporary differences that
give rise to significant portions of the deferred tax assets and
liabilities are presented below:
|
Intangible Assets andR&D
expenses
|
|
Employees Compensation
|
|
Carryforward Losses
|
|
Accrued Expenses
|
|
Doubtful Debt
|
|
Other
|
|
Total
|
|
USD thousands
|
Balance of deferred tax asset (liability) as of January
1, 2020
|
(17,090
|
)
|
|
3,684
|
|
8,435
|
|
2,483
|
|
4,908
|
|
|
(2,501
|
)
|
|
(81
|
)
|
Business combinations
|
(4,409
|
)
|
|
85
|
|
2,330
|
|
250
|
|
168
|
|
|
530
|
|
|
(1,046
|
)
|
Changes recognized in profit or Loss
|
4,626
|
|
|
1,190
|
|
3,380
|
|
1,723
|
|
(1,352
|
)
|
|
3,036
|
|
|
12,603
|
|
Changes recognized in equity
|
162)
|
)
|
|
4,280
|
|
-
|
|
-
|
|
-
|
|
|
160
|
|
|
4,278
|
|
Balance of deferred tax asset (liability) as of December
31, 2020
|
(17,035
|
)
|
|
9,239
|
|
14,145
|
|
4,456
|
|
3,724
|
|
|
1,225
|
|
|
15,754
|
|
Business combinations
|
(1,962
|
)
|
|
|
|
458
|
|
|
|
|
|
|
|
|
(1,504
|
)
|
Changes recognized in profit or Loss
|
13,310
|
|
|
3,861
|
|
|
(4,714
|
)
|
|
(3,117
|
)
|
|
(623
|
)
|
|
(549
|
)
|
|
8,168
|
|
Changes recognized in equity
|
100
|
|
|
(1,026
|
)
|
|
(54
|
)
|
|
1,600
|
|
|
(2
|
)
|
|
|
|
618
|
|
Balance of deferred tax asset (liability) as of December
31, 2021
|
5,587)
|
)
|
|
12,074
|
|
|
9,835
|
|
|
2,939
|
|
|
3,099
|
|
|
676
|
|
|
23,036
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of each reporting date, the Company’s
management considers new evidence, both positive and negative, that
could impact management’s view with regard to future realization of
deferred tax assets.
As of December 31, 2021, and 2020, the Company
has gross unrecognized tax benefits of approximately USD 4,370
thousand and USD 4,471 thousand, respectively. The Company
classifies liabilities for unrecognized tax benefits in Current tax
liabilities.
NOTE 5:
FIXED
ASSETS, NET
|
|
Computers and Servers |
|
Office furniture and equipment |
|
Leasehold improvements |
|
Total |
|
|
USD thousands |
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2020 |
|
5,574 |
|
|
724 |
|
|
1,735 |
|
|
8,033 |
|
|
|
|
|
|
|
|
|
|
Exchange rate differences |
|
13 |
|
|
14 |
|
|
4 |
|
|
31 |
|
Additions |
|
1,768 |
|
|
15 |
|
|
77 |
|
|
1,860 |
|
Business combinations |
|
346 |
|
|
411 |
|
|
73 |
|
|
830 |
|
Disposals |
|
(18 |
) |
|
(32 |
) |
|
(19 |
) |
|
(69 |
) |
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2020 |
|
7,683 |
|
|
1,132 |
|
|
1,870 |
|
|
10,685 |
|
|
|
|
|
|
|
|
|
|
Exchange rate differences |
|
(2 |
) |
|
10 |
|
|
3 |
|
|
11 |
|
Additions |
|
2,010 |
|
|
44 |
|
|
58 |
|
|
2,112 |
|
Business combinations |
|
- |
|
|
1 |
|
|
- |
|
|
1 |
|
(See Note 20) |
Disposals |
|
(852 |
) |
|
(742 |
) |
|
(1,161 |
) |
|
(2,755 |
) |
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2021 |
|
8,839 |
|
|
445 |
|
|
770 |
|
|
10,054 |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2020 |
|
3,439 |
|
|
380 |
|
|
1,082 |
|
|
4,901 |
|
|
|
|
|
|
|
|
|
|
Exchange rate differences |
|
35 |
|
|
2 |
|
|
18 |
|
|
55 |
|
Disposals |
|
(16 |
) |
|
(31 |
) |
|
(19 |
) |
|
(66 |
) |
Additions |
|
1,523 |
|
|
472 |
|
|
508 |
|
|
2,503 |
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2020 |
|
4,981 |
|
|
823 |
|
|
1,589 |
|
|
7,393 |
|
Exchange rate differences |
|
(1 |
) |
|
24 |
|
|
(2 |
) |
|
21 |
|
Disposals |
|
(852 |
) |
|
(742 |
) |
|
(1,161 |
) |
|
(2,755 |
) |
Additions |
|
1,570 |
|
|
164 |
|
|
197 |
|
|
1,931 |
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2021 |
|
5,698 |
|
|
269 |
|
|
623 |
|
|
6,590 |
|
|
|
|
|
|
|
|
|
|
Carrying amounts |
|
|
|
|
|
|
|
|
As of December 31, 2020 |
|
2,702 |
|
|
309 |
|
|
281 |
|
|
3,292 |
|
As of December 31, 2021 |
|
3,141 |
|
|
176 |
|
|
147 |
|
|
3,464 |
|
|
|
|
|
|
|
|
|
|
NOTE 6:
LEASES
a. Leases in which the
Group is the lessee:The Group applies IFRS 16, Leases. The
Group has lease agreements with respect to the following items:
- Offices;- Data center;
1) Information regarding material lease
agreements:a) The Group leases Offices mainly in the United States
of America (US), Israel, Canada and UK with contractual original
lease periods ends between the years 2022 and 2027 from several
lessors. The Group did not assume renewals in determination of the
lease term unless the renewals are deemed to be reasonably assured
at lease commencement.A lease liability in the amount of
USD 12,023 thousand and USD 16,121 thousand as of December 31,
2021, and December 31, 2020, respectively, and right-of-use asset
in the amount of USD 5,424 thousand and USD 5,925 thousand as of
December 31, 2021 and December 31, 2020, respectively have been
recognized in the statement of financial position in respect of
leases of offices.
b) The Group leases data center and related
network infrastructure with contractual original lease periods ends
between the years 2022 and 2023. The Group did not assume renewals
in determination of the lease term unless the renewals are deemed
to be reasonably assured at lease commencement.A lease liability in
the amount of USD 2,972 thousand and USD 5,088 thousand as of
December 31, 2021, and December 31, 2020, respectively, and
right-of-use asset in the amount of USD 2,849 thousand and USD
4,897 thousand as of December 31, 2021, and December 31, 2020,
respectively have been recognized in the statement of financial
position in respect of data centers.
2) Lease liability:Maturity analysis of the
Group's lease liabilities:
|
|
December 31
|
|
|
2021
|
|
2020
|
|
|
USD thousands
|
|
|
|
|
|
Less than one year (0-1)
|
|
7,119
|
|
9,047
|
One to five years (1-5)
|
|
7,042
|
|
10,241
|
More than five years (5+)
|
|
834
|
|
1,921
|
|
|
|
|
|
Total
|
|
14,995
|
|
21,209
|
|
|
|
|
|
Current maturities of lease liability
|
|
7,119
|
|
9,047
|
|
|
|
|
|
Long-term lease liability
|
|
7,876
|
|
12,162
|
|
|
|
|
|
NOTE 6:
LEASES
(Cont.)
3) Right-of-use assets - Composition:
|
Offices
|
|
Data center
|
|
Total
|
|
USD thousands
|
|
|
|
|
|
|
Balance as of January 1, 2020
|
13,155
|
|
|
3,560
|
|
|
16,715
|
|
|
|
|
|
|
|
Business combinations
|
1,026
|
|
|
-
|
|
|
1,026
|
|
Depreciation on right-of-use assets
|
(6,958
|
)
|
|
(4,422
|
)
|
|
(11,380
|
)
|
Additions
|
1,629
|
|
|
5,680
|
|
|
7,309
|
|
Provision for impairment
|
1,808
|
|
|
145
|
|
|
1,953
|
|
Lease modifications
|
(143
|
)
|
|
-
|
|
|
(143
|
)
|
Disposals
|
(4,570
|
)
|
|
(77
|
)
|
|
(4,647
|
)
|
Exchange rate differences
|
(22
|
)
|
|
11
|
|
|
(11
|
)
|
|
|
|
|
|
|
Balance as of December 31, 2020
|
5,925
|
|
|
4,897
|
|
|
10,822
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation on right-of-use assets
|
(5,223
|
)
|
|
(2,312
|
)
|
|
(7,535
|
)
|
Additions
|
3,571
|
|
|
446
|
|
|
4,017
|
|
Provision for impairment
|
1,201
|
|
|
-
|
|
|
1,201
|
|
Lease modifications
|
-
|
|
|
7
|
|
|
7
|
|
Disposals
|
-
|
|
|
(189
|
)
|
|
(189
|
)
|
Exchange rate differences
|
(50
|
)
|
|
-
|
|
|
(50
|
)
|
|
|
|
|
|
|
Balance as of December 31, 2021
|
5,424
|
|
|
2,849
|
|
|
8,273
|
|
|
|
|
|
|
|
4) Amounts recognized in statement of
operation:
|
|
Year endedDecember 31
|
|
|
2021
|
|
|
2020
|
|
|
2019
|
|
|
|
USD thousands
|
|
|
|
|
|
|
|
Interest expenses on lease liability
|
|
(570
|
)
|
|
(1,117
|
)
|
|
(779
|
)
|
Depreciation and amortization of right-of-use assets, net
|
|
(6,334
|
)
|
|
(8,855
|
)
|
|
(9,109
|
)
|
Gains recognized in profit or loss
|
|
7
|
|
|
1,829
|
|
|
1,749
|
|
|
|
|
|
|
|
|
Total
|
|
(6,897
|
)
|
|
(8,143
|
)
|
|
(8,139
|
)
|
|
|
|
|
|
|
|
|
|
|
NOTE 6:
LEASES
(Cont.)
5) Amounts recognized in the statement of cash
flows:
|
|
Year endedDecember 31
|
|
|
2021
|
|
2020
|
|
2019
|
|
|
USD thousands
|
|
|
|
|
|
|
|
Cash outflow for leases
|
|
(10,579
|
)
|
|
(14,468
|
)
|
|
(13,386
|
)
|
b. Leases in which the Group is a
lessor:1) Information regarding material lease
agreements:The Group subleases offices at the US for periods
expiring in 2027.
2) Net investment in the lease:Presented
hereunder is the movement in the net investment in the lease:
|
|
Offices
|
|
|
Year endedDecember 31
|
|
|
2021
|
|
2020
|
|
|
USD thousands
|
|
|
|
|
|
Balance as of January 1,
|
|
7,835
|
|
|
4,288
|
|
|
|
|
|
|
Sublease receipts
|
|
(2,454
|
)
|
|
3,246)
|
)
|
Additions
|
|
301
|
|
|
7,094
|
|
Disposals
|
|
-
|
|
|
301)
|
)
|
|
|
|
|
|
Balance as of December 31,
|
|
5,682
|
|
|
7,835
|
|
|
|
|
|
|
|
|
3) Maturity analysis of net investment in
finance leases:
|
|
Year endedDecember 31
|
|
|
2021
|
|
2020
|
|
|
USD thousands
|
|
|
|
|
|
Less than one year (0-1)
|
|
1,067
|
|
2,153
|
One to five years (1-5)
|
|
3,789
|
|
3,816
|
More than five years (5+)
|
|
826
|
|
1,866
|
|
|
|
|
|
Total net investment in the lease as of December
31,
|
|
5,682
|
|
7,835
|
|
|
|
|
|
NOTE 6:
LEASES
(Cont.)
4) Amounts recognized in statement of
operation:
|
|
Offices
|
|
|
Year endedDecember 31
|
|
|
2021
|
|
2020
|
|
2019
|
|
|
USD thousands
|
|
|
|
|
|
|
|
Gain from subleases
|
|
301
|
|
274
|
|
956
|
Financing income on the net investment in the lease
|
|
245
|
|
361
|
|
71
|
|
|
|
|
|
|
|
Total
|
|
546
|
|
635
|
|
1,027
|
|
|
|
|
|
|
|
NOTE 7:
INTANGIBLE
ASSETS, NET
|
|
Software |
|
Trademarks |
|
Customer relationships |
|
Technology |
|
Others |
|
Goodwill |
|
Total |
|
|
USD thousands |
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2020 |
|
19,237 |
|
|
25,683 |
|
|
37,719 |
|
|
45,087 |
|
|
1,044 |
|
|
133,703 |
|
|
262,473 |
|
Exchange rate differences |
|
- |
|
|
529 |
|
|
567 |
|
|
73 |
|
|
47 |
|
|
1,280 |
|
|
2,496 |
|
Additions |
|
4,858 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
4,858 |
|
Business combinations |
|
- |
|
|
10,427 |
|
|
10,054 |
|
|
1,658 |
|
|
1,068 |
|
|
17,878 |
|
|
41,085 |
|
Balance as of December 31, 2020 |
|
24,095 |
|
|
36,639 |
|
|
48,340 |
|
|
46,818 |
|
|
2,159 |
|
|
152,861 |
|
|
310,912 |
|
Exchange rate differences |
|
(25 |
) |
|
(272 |
) |
|
(374 |
) |
|
(166 |
) |
|
(17 |
) |
|
(1,338 |
) |
|
(2,192 |
) |
Additions |
|
4,966 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
4,966 |
|
Disposals |
|
(5,084 |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(5,084 |
) |
Business combinations (see Note 20) |
|
735 |
|
|
- |
|
|
- |
|
|
6,540 |
|
|
- |
|
|
5,189 |
|
|
12,464 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2021 |
|
24,687 |
|
|
36,367 |
|
|
47,966 |
|
|
53,192 |
|
|
2,142 |
|
|
156,712 |
|
|
321,066 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2020 |
|
9,232 |
|
|
11,458 |
|
|
7,857 |
|
|
22,597 |
|
|
1,044 |
|
|
- |
|
|
52,188 |
|
Exchange rate differences |
|
- |
|
|
202 |
|
|
285 |
|
|
(162 |
) |
|
70 |
|
|
- |
|
|
395 |
|
Additions |
|
5,214 |
|
|
8,976 |
|
|
9,053 |
|
|
9,598 |
|
|
988 |
|
|
- |
|
|
33,829 |
|
Balance as of December 31, 2020 |
|
14,446 |
|
|
20,636 |
|
|
17,195 |
|
|
32,033 |
|
|
2,102 |
|
|
- |
|
|
86,412 |
|
Exchange rate differences |
|
(8 |
) |
|
(170 |
) |
|
(256 |
) |
|
(21 |
) |
|
(21 |
) |
|
- |
|
|
(476 |
) |
Additions |
|
5,522 |
|
|
9,320 |
|
|
9,142 |
|
|
7,949 |
|
|
61 |
|
|
- |
|
|
31,994 |
|
Disposals |
|
(5,084 |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(5,084 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2021 |
|
14,876 |
|
|
29,786 |
|
|
26,081 |
|
|
39,961 |
|
|
2,142 |
|
|
- |
|
|
112,846 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2020 |
|
9,649 |
|
|
16,003 |
|
|
31,145 |
|
|
14,785 |
|
|
57 |
|
|
152,861 |
|
|
224,500 |
|
As of December 31, 2021 |
|
9,811 |
|
|
6,581 |
|
|
21,885 |
|
|
13,231 |
|
|
- |
|
|
156,712 |
|
|
208,220 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalized development costs
Development costs capitalized in the period
amounted to USD 4,933 thousand (2020: USD 4,816 thousand) and were
classified under software.NOTE 7:
INTANGIBLE
ASSETS, NET (Cont.)
Impairment testing for intangible
assets
The Company's qualitative assessment during the
years ended December 31, 2021 and December 31, 2020, did not
indicate that it is more likely than not that the fair value of its
intangible assets, and other long-lived assets is less than the
aggregate carrying amount.
As of December 31, 2021, and December 31, 2020,
the recoverable amount of goodwill was based on fair value less
cost of disposal. The fair value less costs of disposals was
estimated according to quoted price of the Company’s ordinary
shares. The estimated recoverable amount was higher than the
carrying amount, and therefore there was no need for impairment. In
2020, following the acquisition of Unruly, the Company examined the
useful life of intangible assets acquired in the past and
determined to change the estimated economic life of part of the
trademarks asset from 4.75 years to 2.75 years. The effects of
the aforesaid change on amortization expenses for the year ended
December 31, 2020, 2021, 2022 and 2023 is USD 1,512 thousand, USD
3,024 thousand, (USD 2,268) thousand and (USD 2,268) thousand,
respectively.
NOTE 8:
TRADE
AND OTHER RECEIVABLES
|
|
December 31
|
|
|
2021
|
|
2020
|
|
|
USD thousands
|
|
|
|
|
|
Trade receivables:
|
|
|
|
|
Trade receivables
|
|
178,933
|
|
|
162,580
|
|
Allowance for doubtful debts
|
|
(13,870
|
)
|
|
(9,036
|
)
|
|
|
|
|
|
Trade receivables, net
|
|
165,063
|
|
|
153,544
|
|
|
|
|
|
|
Other receivables:
|
|
|
|
|
Prepaid expenses
|
|
13,110
|
|
|
14,053
|
|
Loan to third party
|
|
480
|
|
|
689
|
|
Institutions
|
|
1,050
|
|
|
1,165
|
|
Pledged deposits
|
|
2,647
|
|
|
872
|
|
Other
|
|
949
|
|
|
836
|
|
|
|
|
|
|
|
|
18,236
|
|
|
17,615
|
|
NOTE 9:
TRADE
AND OTHER PAYABLES
|
|
December 31
|
|
|
2021
|
|
2020
|
|
|
USD thousands
|
|
|
|
|
|
Trade payables
|
|
161,812
|
|
125,863
|
|
|
|
|
|
Other payables:
|
|
|
|
|
|
|
|
|
|
Contract liabilities
|
|
11,415
|
|
13,406
|
Wages, salaries and related expenses
|
|
16,406
|
|
13,853
|
Related Parties
|
|
-
|
|
2,746
|
Provision for vacation
|
|
1,003
|
|
554
|
Institutions
|
|
791
|
|
1,112
|
Ad spend liability
|
|
7,729
|
|
5,987
|
Liability for options on non- controlling interest
|
|
-
|
|
2,903
|
Others
|
|
5,556
|
|
6,561
|
|
|
|
|
|
|
|
42,900
|
|
47,122
|
|
|
|
|
|
NOTE 10:
CASH
AND CASH EQUIVALENTS
|
|
December 31
|
|
|
2021
|
|
2020
|
|
|
USD thousands
|
|
|
|
|
|
Cash
|
|
77,537
|
|
44,825
|
Bank deposits
|
|
290,180
|
|
52,638
|
|
|
|
|
|
Cash and cash equivalents
|
|
367,717
|
|
97,463
|
|
|
|
|
|
The Group’s exposure to credit, and currency
risks are disclosed in Note 18 on financial instruments.
NOTE
11: REVENUE
|
|
Year endedDecember 31
|
|
|
2021
|
|
2020
|
|
2019
|
|
|
USD thousands
|
|
|
|
|
|
|
|
Programmatic (1)
|
|
266,616
|
|
161,625
|
|
241,464
|
Performance
|
|
75,329
|
|
50,295
|
|
84,296
|
|
|
|
|
|
|
|
|
|
341,945
|
|
211,920
|
|
325,760
|
|
|
|
|
|
|
|
(1) In 2021 and 2020 programmatic revenue are
reported on a net basis and in 2019 on a gross basis, and
performance revenue reported on a gross basis for all years
presented (see Note 3k).Media cost amounted to USD 117,301 thousand
in the year ended December 31, 2019.
For the year ended December 31, 2021, one buyer
represents 13.6% of revenue. For the years ended December 31, 2020
and 2019, no individual buyer accounted for more than 10% of
revenue.
NOTE
12: COST
OF REVENUE
|
Year endedDecember 31
|
|
2021
|
|
2020
|
|
2019
|
|
USD thousands
|
|
|
|
|
|
|
Programmatic (1)
|
31,572
|
|
31,918
|
|
142,676
|
Performance
|
40,079
|
|
27,889
|
|
44,570
|
|
|
|
|
|
|
Cost of Revenue
|
71,651
|
|
59,807
|
|
187,246
|
|
|
|
|
|
|
(1) In 2021 and 2020 programmatic revenue are
reported on a net basis and in 2019 on a gross basis, and
performance revenue reported on a gross basis for all years
presented (see Note 3k).Media cost amounted to USD 117,301 thousand
in the year ended December 31, 2019.
NOTE
13:
GENERAL
AND ADMINISTRATIVE EXPENSES
|
|
Year endedDecember 31
|
|
|
2021
|
|
2020
|
|
|
2019
|
|
|
USD thousands
|
|
|
|
|
|
|
|
Wages, salaries and related expenses
|
|
17,755
|
|
15,274
|
|
|
11,973
|
Share base payments
|
|
32,250
|
|
9,420
|
|
|
14,100
|
Rent and office maintenance
|
|
549
|
|
(483
|
)
|
|
232
|
Professional expenses
|
|
7,136
|
|
4,766
|
|
|
1,282
|
Doubtful debts
|
|
4,958
|
|
(1,091
|
)
|
|
3,003
|
Acquisition costs
|
|
253
|
|
524
|
|
|
2,840
|
Other expenses
|
|
598
|
|
1,268
|
|
|
1,003
|
|
|
|
|
|
|
|
|
|
63,499
|
|
29,678
|
|
|
34,433
|
NOTE
14: OTHER
EXPENSES (INCOME), NET
During 2019 and 2020, the Company sold a
business unit for which it recognized in 2021 a capital gain of USD
982 thousand related to revenue and profit sharing.
NOTE
15:
SHAREHOLDERS’
EQUITY
Issued and paid-in share capital:
|
|
Ordinary 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
|
)
|
|
(5,277,220
|
)
|
Share based compensation
|
|
5,564,808
|
|
|
6,444,944
|
|
Issuance of shares in IPO *
|
|
15,568,590
|
|
|
-
|
|
Issuance of Restricted shares **
|
|
370,000
|
|
|
-
|
|
Shares issued in business combination ***
|
|
-
|
|
|
8,525,323
|
|
|
|
|
|
|
Issued and paid-in share capital as of December 31
|
|
154,501,629
|
|
|
133,916,229
|
|
|
|
|
|
|
Authorized share capital
|
|
500,000,000
|
|
|
300,000,000
|
|
* See Note 1d** See Note 20***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.
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.
Own shares acquisition:
On December 20, 2020, the Board of Directors
approved a USD 10 million buyback program. On March 26, 2021, the
Board of Directors terminated the buyback program due to the
Company’s election to pursue the Proposed Offering, which was
completed in the second quarter of 2021 (see Note 1d).
NOTE
16:
EARNINGS
PER SHARE
Basic earnings per share
The calculation of basic earnings per share as
of December 31, 2021, 2020 and 2019 was based on the profit for the
year divided by a weighted average number of ordinary shares
outstanding, calculated as follows:
Profit for the year:
|
|
Year endedDecember 31
|
|
|
2021
|
|
2020
|
|
2019
|
|
|
USD thousands
|
|
|
|
|
|
|
|
Profit for the year
|
|
73,223
|
|
2,139
|
|
6,224
|
Weighted average number of ordinary
shares:
|
|
Year endedDecember 31
|
|
|
2021
|
|
2020
|
|
2019
|
|
|
Shares of NIS
|
|
|
0.01 par value
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares used to calculate
basic earnings per share as at December 31
|
|
144,493,989
|
|
133,991,210
|
|
111,231,769
|
|
|
|
|
|
|
|
Basic earnings per share (in
USD)
|
|
0.51
|
|
0.02
|
|
0.06
|
NOTE
16:
EARNINGS
PER SHARE (cont.)
Diluted earnings per share:
The calculation of diluted earnings per share as
of December 31, 2021, 2020 and 2019 was based on profit or for the
year 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):
|
|
Year endedDecember 31
|
|
|
2021
|
|
2020
|
|
2019
|
|
|
Shares of NIS
|
|
|
0.01 par value
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares used to calculate
basic earnings per share
|
|
144,493,989
|
|
133,991,210
|
|
111,231,769
|
Effect of share options on issue
|
|
8,212,903
|
|
4,714,985
|
|
3,576,114
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares used to calculate
diluted earnings per share
|
|
152,706,892
|
|
138,706,195
|
|
114,807,883
|
|
|
|
|
|
|
|
Diluted earnings per share (in USD)
|
|
0.48
|
|
0.02
|
|
0.05
|
NOTE
17:
SHARE-BASED
COMPENSATION 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 ordinary shares or ADSs.
- Vesting conditions are based on a
service period of between 0.5-4 years.
On April 2, 2019, the Company's shareholders
adopted the New Tremor International Ltd. Management Incentive
Scheme to provide for the grant of 11,772,932 equity incentive
awards to executive officers. In addition, following the
acquisition of RhythmOne, the Company's shareholders adopted
RhythmOne Plan to provide for the grant of 1,328,908 equity
incentive award to RhythmOne executives and employees.
As part of the New Tremor International Ltd.
Management Incentive Scheme, and following the acquisition of
RhythmOne, the Company's shareholders approved a modification in
the exercise price of 1,200,000 Company share options awarded to
the CEO of the Group, out of which 1,080,000 share options will be
vested subject to meet the performance-based metrics, and the
remaining options will be vested over a shorter service periods.
Furthermore, restricted stock units of 400,000 to the Group’s CEO
were modified for a shorter vesting periods.
NOTE
17:
SHARE-BASED
COMPENSATION ARRANGEMENTS
(Cont.)
b. Stock
Options:The number of share options is as follows:
|
|
Number of options
|
|
Weighted average exercise
price
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
(Thousands)
|
|
(USD)
|
|
|
|
|
|
|
|
|
|
Outstanding at 1 January
|
|
3,781
|
|
|
4,828
|
|
|
2.19
|
|
3.95
|
Forfeited during the year
|
|
(359
|
)
|
|
(1,621
|
)
|
|
6.79
|
|
3.91
|
Exercised during the year
|
|
(652
|
)
|
|
(1,227
|
)
|
|
2.08
|
|
0.72
|
Granted during the year
|
|
3,256
|
|
|
1,801
|
|
|
10.76
|
|
2.21
|
|
|
|
|
|
|
|
|
|
Outstanding at December 31
|
|
6,026
|
|
|
3,781
|
|
|
6.54
|
|
2.19
|
Exercisable at December 31
|
|
1,540
|
|
|
51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
Grated date
|
|
Number of options
|
|
Exercise price
(GBP)
|
|
Exercisable date from
|
|
Exercise price(GBP)
|
|
Exercisable date from
|
|
|
|
|
|
|
|
|
|
|
|
March 20, 2017
|
|
217,000
|
|
2.44
|
|
March 20, 2019
|
|
1.60
|
|
July 28, 2021
|
June 18, 2017
|
|
116,000
|
|
2.99
|
|
June 18, 2019
|
|
1.60
|
|
July 28, 2021
|
November 5, 2017
|
|
391,000
|
|
4.31
|
|
November 5, 2019
|
|
1.60
|
|
July 28, 2021
|
January 23, 2018
|
|
1,163,000
|
|
4.37
|
|
January 23, 2020
|
|
1.60
|
|
July 31, 2021
|
June 20, 2018
|
|
52,000
|
|
4.37
|
|
June 20, 2020
|
|
1.60
|
|
July 31, 2021
|
April 2, 2019 (*)
|
|
265,174
|
|
2.06-18.27
|
|
April 2, 2019
|
|
1.60
|
|
July 28, 2021
|
(*) Granted as part of RhythmOne’s acquisition
as listed above.
The options that had a vesting date up to July
2021 were vested and became 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.
NOTE
17:
SHARE-BASED
COMPENSATION ARRANGEMENTS
(Cont.)
Information on measurement of fair value
of share-based compensation
plans:
The fair value of employees share options is
measured using the Black-Scholes formula. Measurement inputs
include the share price on the measurement date, the exercise price
of the instrument, expected volatility, expected term of the
instruments, expected dividends, and the risk-free interest rate
(See Note 3i).
The parameters used in the measurement of the
fair values at grant date of the equity-settled share-based
compensation plans were as follows:
|
|
2021
|
|
2020
|
|
|
|
|
|
Grant date fair value in USD
|
|
4.3
|
|
|
1.04-1.73
|
Share price (on grant date) (in USD)
|
|
10.09
|
|
|
1.74-3.03
|
Exercise price (in USD)
|
|
10.76
|
|
|
1.89-3.06
|
Expected volatility (weighted average)
|
|
60%
|
|
|
60%
|
Expected life (weighted average)
|
|
3.75
|
|
|
3.5-3.75
|
Expected dividends
|
|
0.00%
|
|
|
0.00%
|
Risk-free interest rate
|
|
0.54%
|
|
|
0.15%-1.46%
|
The total expense recognized in the year ended
December 31, 2021, with respect to the options granted to
employees, amounted to approximately USD 3,412 thousand (2020: USD
2,693 thousand).
c. Restricted Share
Units:During 2021 and 2020, the Group granted 7,366,472
and 3,334,074 Restricted Share Units (RSU’s) to its executive
officers and employees, respectively.
The number of restricted share units is as
follows:
|
|
Number of RSU’s
|
|
Weighted-Average Grant Date Fair Value
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
(Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at 1 January
|
|
3,777
|
|
|
3,969
|
|
|
2.364
|
|
2.372
|
Forfeited during the year
|
|
(25
|
)
|
|
(46
|
)
|
|
7.861
|
|
2.511
|
Exercised during the year
|
|
(2,972
|
)
|
|
(3,480
|
)
|
|
4.447
|
|
2.296
|
Granted during the year
|
|
7,366
|
|
|
2,919
|
|
|
10.017
|
|
2.538
|
Restricted stock units assumed in acquisition during the
year
|
|
-
|
|
|
415
|
|
|
-
|
|
2.592
|
|
|
|
|
|
|
|
|
|
Outstanding at December 31
|
|
8,146
|
|
|
3,777
|
|
|
8.606
|
|
2.364
|
|
|
|
|
|
|
|
|
|
The total expense recognized in the year ended
December 31, 2021, with respect to the RSU’s granted to employees,
amounted to approximately USD 29,530 thousand (2020: USD
7,443thousand).
NOTE
17:
SHARE-BASED
COMPENSATION ARRANGEMENTS
(Cont.)
d. Performance Stock
Units:During 2021 and 2020, the Group granted 2,668,240
and 725,000 Performance Stock Units (PSU’s) to its executive
officers, respectively.
The number of performance stock units is as follows:
|
|
Number of PSU’s
|
|
Weighted-Average Grant Date Fair Value
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
(Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at January 1
|
|
3,852
|
|
|
5,071
|
|
|
2.155
|
|
2.105
|
Forfeited during the year
|
|
(93
|
)
|
|
(206
|
)
|
|
2.253
|
|
2.211
|
Exercised during the year
|
|
(1,941
|
)
|
|
(1,738
|
)
|
|
2.204
|
|
2.185
|
Granted during the year
|
|
2,668
|
|
|
725
|
|
|
9.999
|
|
2.590
|
|
|
|
|
|
|
|
|
|
Outstanding at December 31
|
|
4,486
|
|
|
3,852
|
|
|
6.796
|
|
2.155
|
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 the year ended
December 31, 2021, with respect to the PSU’s granted to employees,
amounted to approximately USD 9,876 thousand (2020: USD
4,354thousand).
e. Expense
recognized in the statement of operation and other comprehensive
income is as follows:
|
|
Year endedDecember 31
|
|
|
2021
|
|
2020
|
|
2019
|
|
|
USD thousands
|
|
|
|
|
|
|
|
Selling and marketing
|
|
7,094
|
|
4,515
|
|
1,257
|
Research and development
|
|
3,474
|
|
555
|
|
452
|
General and administrative
|
|
32,250
|
|
9,420
|
|
14,100
|
|
|
|
|
|
|
|
|
|
42,818
|
|
14,490
|
|
15,809
|
NOTE
18:
FINANCIAL
INSTRUMENTS
a. Overview:The Group has
exposure to the following risks from its use of financial
instruments:
- Credit risk
- Liquidity risk
- Market risk
This note presents quantitative and qualitative
information about the Group’s exposure to each of the above risks,
and the Group’s objectives, policies and processes for measuring
and managing risk.
In order to manage these risks and as described
hereunder, the Group executes transactions in derivative financial
instruments. Presented hereunder is the composition of the
derivatives:
|
|
December 31
|
|
|
2021
|
|
2020
|
|
|
USD thousands
|
|
|
|
|
|
Derivatives presented under current assets
|
|
|
|
|
Forward exchange contracts used for hedging
|
|
947
|
|
836
|
|
|
|
|
|
Derivatives presented under non-current
assets
|
|
|
|
|
Forward exchange contracts used for hedging
|
|
241
|
|
1,335
|
|
|
|
|
|
Total
|
|
1,188
|
|
2,171
|
b. Risk management
framework:
The Board of Directors has overall
responsibility for the establishment and oversight of the Group’s
risk management framework. The Board is responsible for developing
and monitoring the Group’s risk management policies.
The Group’s risk management policies are
established to identify and analyze the risks faced by the Group,
to set appropriate risk limits and controls, and to monitor risks
and adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and the
Group’s activities. The Group, through its training and management
of standards and procedures, aims to develop a disciplined and
constructive control environment in which all employees understand
their roles and obligations.
The Group Audit Committee oversees how
management monitors compliance with the Group’s risk management
policies and procedures and reviews the adequacy of the risk
management framework in relation to the risks faced by the Group.
The Group Audit Committee is assisted in its oversight role by
Internal Audit. Internal Audit undertakes both regular and ad hoc
reviews of risk management controls and procedures, the results of
which are reported to the Audit Committee.
NOTE
18:
FINANCIAL
INSTRUMENTS
c. Credit
risk:The Group’s credit risk is arise from the risk of
financial loss if a customer or counterparty to a financial
instrument fails to meet its contractual obligations.
d. Exposure to credit riskThe
carrying amount of financial assets represents the maximum credit
exposure.
The maximum exposure to credit risk at the
reporting date was as follows:
|
|
December 31
|
|
|
2021
|
|
2020
|
|
|
USD thousands
|
|
|
|
|
|
Cash and cash equivalents
|
|
367,717
|
|
97,463
|
Trade receivables, net (a)
|
|
165,063
|
|
153,544
|
Other receivables
|
|
4,076
|
|
2,379
|
Long term deposit
|
|
431
|
|
499
|
Long term receivables
|
|
241
|
|
1,335
|
|
|
|
|
|
|
|
537,528
|
|
255,220
|
(a) At December 31, 2021, the Group included
provision for doubtful debts in the amount of USD 13,870 thousand
(December 31, 2020: USD 9,036 thousand) in respect of collective
impairment provision and specific debtors that their collectability
is in doubt.
As of December 31, 2021, two buyers accounted
for 17.1% and 16.9% of trade receivables. As of December 31, 2020,
one buyer accounted for 17.5% of trade receivables.
|
|
Allowance for Doubtful debts
|
|
|
2021
|
|
|
2020
|
|
|
|
USD thousands
|
|
|
|
|
|
Balance at January 1
|
|
9,036
|
|
|
22,376
|
|
Business combination
|
|
-
|
|
|
1,201
|
|
Allowance for doubtful debts expenses
|
|
4,958
|
|
|
(1,091
|
)
|
Write-off
|
|
(93
|
)
|
|
(13,397
|
)
|
Exchange rate difference
|
|
(31
|
)
|
|
(53
|
)
|
|
|
|
|
|
Balance at December 31
|
|
13,870
|
|
|
9,036
|
|
e. Liquidity
risk:Liquidity risk is the risk that the Group will
encounter difficulty in meeting the obligations associated with its
financial liabilities that are settled by delivering cash or
another financial asset. The Group’s approach to managing liquidity
is to ensure, as far as possible, that it has sufficient liquidity
to meet its liabilities when due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage
to the Group’s reputation.
NOTE
18: FINANCIAL
INSTRUMENTS (Cont.)
As of December 31, 2021, and December 31, 2020,
the Group’s contractual obligation of financial liability is in
respect of leases, trade, and other payables in the amount of USD
193,213 thousand and USD 161,875 thousand, respectively. The
contractual maturity of the financial liability that is less than
one year is in the amount of USD 185,337 thousand and USD 147,243
thousand for December 31, 2021, and December 31, 2020,
respectively.
f. Market risk:Market risk is
the risk that changes in market prices, such as foreign exchange
rates, the CPM, interest rates and equity prices will affect the
Group’s income or the value of its holdings of financial
instruments. The objective of market risk management is to manage
and control market risk exposures within acceptable parameters,
while optimizing the return.
At December 31, 2021, USD 8,118 thousand are
held in JPY, USD 7,099 thousand are held in AUD, USD 5,653
thousand are held in GBP, USD 4,866 thousand are held in EUR, USD
1,287 thousand are held in CAD, USD 899 thousand are held in SGD,
USD 513 thousand are held in MXN, USD 247 thousand are held in NIS,
USD 976 thousand are held in other currencies and the remainder
held in USD.
g. Sensitivity
analysis:A change as of December 31 in the exchange rates
of the following currencies against the USD, as indicated below
would have affected the measurement of financial instruments
denominated in a foreign currency and would have increased
(decreased) profit or loss and equity by the amounts shown below
(after tax). This analysis is based on foreign currency exchange
rate that the Group considered to be reasonably possible at the end
of the reporting period. The analysis assumes that all other
variables, in particular interest rates, remain constant and
ignores any impact of forecasted sales and purchases.
|
|
2021 |
|
|
2020 |
|
GBP/USD |
|
+10 |
% |
|
-10 |
% |
|
+10 |
% |
|
-10 |
% |
|
|
USD thousands |
|
|
|
|
|
|
|
|
|
Profit / (Loss) |
|
(2,587 |
) |
|
2,587 |
|
|
(2,853 |
) |
|
2,853 |
|
Increase / (Decrease) in Shareholders’ Equity |
|
(379 |
) |
|
379 |
|
|
528 |
|
|
(528 |
) |
|
|
|
|
|
|
|
|
|
|
|
2021 |
|
|
2020 |
|
NIS/USD |
|
+10 |
% |
|
-10 |
% |
|
+10 |
% |
|
-10 |
% |
|
|
USD thousands |
|
|
|
|
|
|
|
|
|
Profit / (Loss) |
|
(721 |
) |
|
721 |
|
|
(387 |
) |
|
387 |
|
Increase / (Decrease) in Shareholders’ Equity |
|
(721 |
) |
|
721 |
|
|
(387 |
) |
|
387 |
|
NOTE 18:
FINANCIAL
INSTRUMENTS (Cont.)
Linkage and foreign currency
risks
Currency risk
The Group is not exposed to currency risk on
sales and purchases that are denominated in a currency other than
the respective functional currency of the Group, the USD. The
principal currencies in which these transactions are denominated
are GBP, NIS, Euro, CAD, SGD, MXN, AUD and JPY.
At any point in time, the Group aims to match
the amounts of its assets and liabilities in the same currency in
order to hedge the exposure to changes in currency.In respect of
other monetary assets and liabilities denominated in foreign
currencies, the Group ensures that its net exposure is kept to an
acceptable level by buying or selling foreign currencies at spot
rates when necessary to address short-term imbalances.
NOTE
19:
RELATED
PARTIES
Compensation and benefits to key
management personnel
Executive officers also participate in the
Company’s share option programs. For further information see Note
17 regarding share-based compensation. Compensation and benefits to
key management personnel (including directors) that are employed by
the Company and its subsidiaries:
|
|
Year endedDecember 31
|
|
|
2021
|
|
2020
|
|
|
USD thousands
|
|
|
|
|
|
Share-based compensation
|
|
31,283
|
|
7,061
|
Other compensation and benefits
|
|
6,752
|
|
3,932
|
|
|
|
|
|
|
|
38,035
|
|
10,993
|
NOTE
20:
SUBSIDIARIES
a. Details in respect
of subsidiaries:Presented hereunder is a list of the
Group’s subsidiary:
|
Principal
|
|
The Group’s ownership interest
|
|
location of the
|
|
in the subsidiary for theyear
ended
|
|
Company’s
|
|
December 31
|
Name of company
|
activity
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
Taptica Inc
|
USA
|
|
100
|
%
|
|
100
|
%
|
Tremor Video Inc
|
USA
|
|
100
|
%
|
|
100
|
%
|
Adinnovation Inc
|
Japan
|
|
100
|
%
|
|
57
|
%
|
Taptica Japan
|
Japan
|
|
100
|
%
|
|
100
|
%
|
Taptica UK
|
United Kingdom
|
|
100
|
%
|
|
100
|
%
|
YuMe Inc*
|
USA
|
|
100
|
%
|
|
100
|
%
|
Perk.com Canada Inc
|
Canada
|
|
100
|
%
|
|
100
|
%
|
R1Demand LLC*
|
USA
|
|
100
|
%
|
|
100
|
%
|
Unruly Group LLC
|
USA
|
|
100
|
%
|
|
100
|
%
|
Unruly Group US Holding Inc*
|
USA
|
|
100
|
%
|
|
100
|
%
|
Unruly Holdings Ltd*
|
UK
|
|
100
|
%
|
|
100
|
%
|
Unruly Group Ltd
|
UK
|
|
100
|
%
|
|
100
|
%
|
Unruly Media GmbH
|
Germany
|
|
100
|
%
|
|
100
|
%
|
Unruly Media Pte Ltd*
|
Singapore
|
|
100
|
%
|
|
100
|
%
|
Unruly Media Pty Ltd
|
Australia
|
|
100
|
%
|
|
100
|
%
|
Unruly Media KK
|
Japan
|
|
100
|
%
|
|
100
|
%
|
Unmedia Video Distribution Sdn Bhd
|
Malaysia
|
|
100
|
%
|
|
100
|
%
|
Unruly Media Inc
|
USA
|
|
100
|
%
|
|
100
|
%
|
SpearAd GmbH
|
Germany
|
|
100
|
%
|
|
0
|
%
|
|
|
|
|
|
* Under these companies, there are twenty-nine
(29) wholly owned subsidiaries that are inactive and in liquidation
process.
NOTE
20:
SUBSIDIARIES
(Cont.)
b. Acquisition of subsidiaries and
business combinations during the current
period:Acquisition of
SpearAd:
On October 18, 2021, the Company completed the
acquisition of SpearAd GMBH ("SpearAd"). The Company acquired 100%
of the issued and outstanding SpearAd Shares for total
consideration of USD 11,016 thousand.
At the same time, some of the SpearAd
shareholders entered into Employment Agreements and Restricted
Share Agreements to receive 370,000 ordinary shares of NIS 0.01 of
the Company, Subject to continues employment and compliance with
the performance criteria to be released gradually over a three-year
period. The restricted shares were fully issued on the closing date
and the fair value was USD 3,484 thousand, which presented as a
deduction from the share premium.As of December 31, 2021, the
balance of the Restricted Shares is USD 3,052 thousand.
The following summarizes the major classes of
consideration transferred, and the recognized amounts of assets
acquired, and liabilities assumed at the acquisition date:
|
USD thousands
|
|
|
Cash and Cash equivalents
|
154
|
|
Accounts Receivables
|
20
|
|
Other assets
|
8
|
|
Fixed Assets
|
1
|
|
Intangible assets
|
7,275
|
|
Deferred tax Liabilities
|
(1,504
|
)
|
Trade payables
|
(99
|
)
|
Other Payables
|
(28
|
)
|
|
|
Net identifiable assets
|
5,827
|
|
The aggregate
cash flow derived for the Company as a result of the SpearAd
acquisition:
|
|
USD thousands
|
|
|
|
Cash and cash equivalents at SpearAd
|
|
154
|
|
Acquisition- Related costs
|
|
(253
|
)
|
|
|
|
Acquisition of subsidiary
|
|
(99
|
)
|
NOTE
20:
SUBSIDIARIES
(Cont.)
The Company incurred acquisition-related costs
of USD 253 thousand related to legal fees and due diligence costs.
These costs have been included in general and administrative
expenses in the statement of operation. As of December 31, 2021,
USD 139 out of the acquisition-related costs were paid.
Goodwill
Goodwill was recognized as a result of the
acquisition as follows:
|
|
USD thousands
|
|
|
|
Consideration transferred
|
|
11,016
|
Less fair value of identifiable net assets
|
|
5,827
|
|
|
|
Goodwill
|
|
5,189
|
The goodwill is attributable mainly to the
increased opportunities for growth and the synergies expected to be
achieved from integration into the Company’s digital advertising
platforms (Note 7). None of the goodwill recognized is expected to
be deductible for tax purposes.
c. Acquisition of
subsidiaries and business combinations during
the prior
periods:Acquisition
of Unruly:
On January 4, 2020, the Company completed the
acquisition of Unruly Holdings Limited and Unruly Media Inc. from
News Corp UK & Ireland Limited (UK Seller) and News Preferred
Holdings Inc. (US Seller) for total consideration of: (i) issuance
of 7,960,111 Ordinary Shares of the Company to the UK Seller in
exchange for a loan in the amount of GBP 12,020 thousand (USD
15,729 thousand) between UK Seller (as lender) and Unruly Group
Limited (as borrower); (ii) GBP 1 to UK Seller for 100% of the
issued share capital of Unruly Holdings Limited; and (iii) issuance
of 565,212 Ordinary Shares of the Company to the US Seller and USD
1 for 100% of the issued share capital of Unruly Media Inc.
The issuance of an aggregate 8,525,323 Ordinary
Shares of the Company to UK Seller and US Seller represented
approximately 6.91% of the Company's issued voting share capital at
such time. The Sellers agreed not to sell, transfer or otherwise
dispose of such Company Ordinary Shares for an 18-month period,
subject to customary exceptions.
At the same time, Tremor Video entered into a
Master Service Agreement (MSA) with the UK seller for an exclusive
right to sell outstream video on various News Corp titles
world-wide on a committed ad spend of GBP 30,000 thousand over a
three-year period with an option to extend the MSA by two quarters
at the discretion of UK seller. The obligation for the net
discounted future payments exceeding market fair value aggregated
to USD 14,073 thousand and is recognized according to the actual
consumption. As of December 31, 2021, and December 31,2020 the ad
spend liability balance aggregated to USD 7,729 thousand and USD
13,811 thousand respectively.
NOTE
20:
SUBSIDIARIES
(Cont.)
Acquisition of RhythmOne:
On April 1, 2019, the Company completed
Acquisition Transaction (hereinafter- "Acquisition") with RhythmOne
Plc, a Company incorporated under the laws of England and Wales,
whereby the Company acquired the entire issued ordinary shares of
RhythmOne and each RhythmOne shareholder received 28 new shares of
the Company (as such new 66,736,485 shares of the Company were
issued) for every 33 RhythmOne shares held,
so that following the completion of the
Acquisition, the Company's current shareholders held 50.1% and,
RhythmOne Shareholders held 49.9% of the merged Group. In addition,
849,325 options and 1,058,776 restricted shares units over
RhythmOne share awarded were rolled over to 458,946 the Company's
options and to 869,962 the Company's restricted units (hereinafter-
"Replacement Award"). The consideration of the Acquisition amounted
to USD 176,421 thousand (including consideration allocated to
issuance of ordinary shares and Replacement Award).
NOTE
21:
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.
|
|
Year endedDecember 31
|
|
|
2021
|
|
2020
|
|
2019
|
|
|
USD thousands
|
|
|
|
|
|
|
|
America
|
|
304,686
|
|
180,515
|
|
261,534
|
APAC
|
|
20,931
|
|
20,804
|
|
33,052
|
EMEA
|
|
16,328
|
|
10,601
|
|
31,174
|
|
|
|
|
|
|
|
Total
|
|
341,945
|
|
211,920
|
|
325,760
|
|
|
|
|
|
|
|
NOTE 22:
CONTINGENT
LIABILITY
a. In January 2018, AlmondNet, Inc. and its
affiliates (Datonics LLC and Intent IQ) contacted RhythmOne
asserting that RhythmOne’s online advertising system infringes
eleven U.S. Patents owned by the AlmondNet Group. As of the date of
this report, a claim was never filed and RhythmOne is currently in
a commercial agreement with AlmondNet’s affiliate. The Company
believes that the likelihood of a material loss is remote but at
this point is unable to reasonably estimate any potential loss and
financial impact to the Company resulting from this matter.
b. On May 18, 2021, the Company filed a
complaint against Alphonso, Inc. (“Alphonso”) in the Supreme Court
of the State of New York, County of New York (the “Court”),
asserting claims for breach of contract, tortious interference with
business relations, intentional interference with contractual
relations, unjust enrichment, and conversion.
NOTE 22:
CONTINGENT
LIABILITY (Cont.)
The lawsuit arose out of Alphonso’s breach of a
Strategic Partnership Agreement and an Advance Payment Obligation
and Security Agreement (the “Security Agreement”) with the Company,
and related misconduct. The Company is seeking damages and
other relief, including an order foreclosing on Alphonso’s
collateral under the Security Agreement, from the Court.On May 24,
2021, Alphonso filed a complaint against the Company in the Supreme
Court of the State of New York, County of New York, asserting
claims for breach of contract, unfair competition, and
tortious interference with business relations. Alphonso and
the Company are currently engaged in written discovery.
NOTE
23: SUBSEQUENT
EVENTS
On February 23, 2022, the Board of Directors
approved a share buyback program of up to USD 75 million.
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