Perion Network Ltd (PERI) 2023 Q2 法說會逐字稿

Hello everybody, and welcome to the Perion Network Second Quarter 2023 Earnings Conference Call.

大家好，歡迎參加 Perion Network 2023 年第二季度收益電話會議。

Today’s conference is being recorded. The press release detailing the financial results is available on the Company’s website at www.perion.com.

今天的會議正在錄製中。詳細介紹財務業績的新聞稿可在公司網站 www.perion.com 上獲取。

Before we begin, I’d like to read the following Safe Harbor statement.

在我們開始之前，我想閱讀以下安全港聲明。

Today’s discussion includes forward-looking statements. These statements reflect the Company’s current Views with respect to future events. These forward-looking statements involve known and unknown risks Uncertainties and other factors, including those discussed under the heading, Risk Factors, and elsewhere in the Company’s annual report on Form 20-F that may cause actual results, performance or achievements to be materially different, and any future results, performance or achievements anticipated Or implied by these forward-looking statements. The Company does not undertake to update any forward looking statements to reflect future events or circumstances.

今天的討論包括前瞻性陳述。這些陳述反映了公司當前對未來事件的看法。這些前瞻性陳述涉及已知和未知的風險、不確定性和其他因素，包括在公司20-F 表格年度報告標題“風險因素”和其他地方討論的因素，這些因素可能導致實際結果、業績或成就發生變化。與這些前瞻性陳述預期或暗示的任何未來結果、業績或成就存在重大差異。公司不承諾更新任何前瞻性陳述以反映未來事件或情況。

As in prior quarters, the results reported today will be analyzed both on a GAAP and non-GAAP basis.

與前幾個季度一樣，今天報告的結果將根據公認會計原則和非公認會計原則進行分析。

While mentioning EBITDA, we will be referring to Adjusted EBITDA. We have provided a detailed reconciliation of non-GAAP measures to their comparable GAAP measures in our earnings release, which Is available on our website and has also been filed on Form 6-K.

在提到 EBITDA 時，我們將指的是調整後 EBITDA。我們在收益報告中提供了非 GAAP 指標與其可比 GAAP 指標的詳細調節表，該調節表可在我們的網站上獲取，並且也已在表格 6-K 中提交。

Hosting the call today are Tal Jacobson, Perion’s Chief Executive Officer, and Maoz Sigron, Perion’s Chief Financial Officer. I would now like to turn the call over to Tal Jacobson. Please go ahead.

今天主持電話會議的是 Perion 首席執行官 Tal Jacobson 和 Perion 首席財務官 Maoz Sigron。我現在想把電話轉給塔爾·雅各布森。請繼續。

Hello everyone. I’m Tal Jacobson, and I’m excited to welcome you to our second quarter earnings report for the first time as Perion’s CEO. With me is Maoz Sigron, Perion’s CFO. It is truly an honor to take on This role and lead Perion into the future.

大家好。我是塔爾·雅各布森 (Tal Jacobson)，我很高興歡迎您首次以 Perion 首席執行官的身份閱讀我們的第二季度收益報告。和我在一起的是 Perion 的首席財務官毛茲·西格隆 (Maoz Sigron)。能夠擔任這一角色並帶領 Perion 走向未來，我感到非常榮幸。

I’ve been running Perion’s search advertising division since 2018, where we’ve built a thriving business Model and a deep partnership with Microsoft Advertising, and I was also part of the Executive Team that Built and executed the foundation of Perion. At Perion, we have an incredible team of talented individuals That built a robust foundation that will lead Perion into the future. I want to thank each and every one of them for their hard work and dedication.

我自 2018 年以來一直負責 Perion 的搜索廣告部門，我們在該部門建立了蓬勃發展的業務模式並與 Microsoft Advertising 建立了深厚的合作夥伴關係，我也是執行團隊的一員，該團隊構建並執行了佩里翁。在 Perion，我們擁有一支令人難以置信的才華橫溢的團隊，他們奠定了堅實的基礎，將帶領 Perion 走向未來。我要感謝他們每一個人的辛勤工作和奉獻精神。

Doron Gerstel, Perion’s previous CEO has been a great leader, combining imagination and execution I’d Like to thank him for his outstanding leadership and for staying with us on the Board of Directors, allowing us to continue to shape the future of Perion together.

Perion 的前任首席執行官 Doron Gerstel 是一位偉大的領導者，將想像力與執行力融為一體，我要感謝他出色的領導才能以及與我們一起留在董事會，使我們能夠繼續塑造未來佩里翁在一起。

My journey to this point was full of life lessons. One of the most important lessons I’ve learned about business is that agility is a key factor for long-lasting success. Almost 20 years ago, I was hired together With some incredible people to create a turnaround for ICQ that was part of AOL. ICQ was the first global Success to come out of Israel’s start-up nation. AOL acquired ICQ for its instant messaging technology And rapid growth. At that time, ICQ finished developing a new product for mobile group messaging that Had the same features that WhatsApp and Telegram have today.

我走到這一步的旅程充滿了人生教訓。我在商業中學到的最重要的教訓之一是敏捷性是持久成功的關鍵因素。大約 20 年前，我與一些出色的人一起受聘，幫助 AOL 旗下的 ICQ 實現扭虧為盈。 ICQ 是第一個來自以色列新興國家的全球成功案例。 AOL 收購 ICQ 是因為其即時通訊技術的快速增長。當時，ICQ 完成了一款用於移動群組消息傳遞的新產品的開發，該產品具有與今天的 WhatsApp 和 Telegram 相同的功能。

Now think about it for a moment - almost 20 years ago, ICQ was already there, yet the mobile product was not launched back then. The primary objective for which I was employed had been achieved and the desktop product was a huge success. The company was so captivated by the desktop success, dropping the ball on mobile messaging, and ICQ lost its competitive edge it had in that time.

現在想想，差不多20年前，ICQ就已經有了，但當時還沒有推出移動產品。我受僱的主要目標已經實現，桌面產品取得了巨大的成功。該公司對桌面端的成功如此著迷，卻在移動消息傳遞上失敗了，ICQ 失去了當時的競爭優勢。

The lesson here is that to be winners, we must keep one foot in the present and one foot in the future. Winners are those who can build on their uniqueness, and at the same time look forward to product innovation and quickly adapt When needed. Perion continues to grow in the digital advertising market thanks to our ability to remain Agile, gaining market share in our core activities while constantly thinking of new markets to penetrate.

這裡的教訓是，要成為贏家，我們必須一隻腳立足現在，一隻腳著眼未來。獲勝者是那些能夠發揮自己的獨特性，同時期待產品創新並在需要時快速適應的人。 Perion 在數字廣告市場上持續增長，這要歸功於我們保持敏捷的能力，在我們的核心活動中獲得市場份額，同時不斷思考要滲透的新市場。

Now let’s get down to business and review Q2 2023 results versus the market trends. Perion continues to demonstrate a sustained ability to outperform the industry. The digital advertising Industry is filled with many smart companies with strong leaders and with excellent technology, and yet we continue to outperform. Our success is a combination of our ability to capture shifts in advertising budgets while maintaining high margins.

現在讓我們言歸正傳，回顧一下 2023 年第二季度的業績與市場趨勢。 Perion 繼續展現出超越行業的持續能力。數字廣告行業充滿了許多擁有強大領導者和卓越技術的聰明公司，但我們仍然表現出色。我們的成功取決於我們在保持高利潤的同時抓住廣告預算變化的能力。

The best way to achieve both levels of growth is through our strategic diversification business model. This is accompanied by a culture that fosters agility, moving fast and seizing opportunities as they emerge.

實現這兩個層面的增長的最佳途徑是通過我們的戰略多元化業務模式。與之相伴的是一種培養敏捷性、快速行動和抓住出現機會的文化。

Despite the rapid shifts in media allocations strategies in the market, Perion is well positioned to gain market share. Our diversification allows us to be flexible and “meet the moment” no matter how much it shifts and changes. Perion’s Q2 growth numbers across Search Advertising, Video, CTV, Retail Media.

儘管市場上的媒體分配策略發生了快速變化，但 Perion 仍處於贏得市場份額的有利位置。我們的多元化使我們能夠保持靈活性並“迎合當下”，無論它有多大的轉變和變化。 Perion 第二季度搜索廣告、視頻、CTV、零售媒體的增長數據。

And Digital Advertising as a whole tell the story. It’s all part of our strategy to follow digital advertising budgets as they shift between channels and establish a strong foothold in fast-growing markets where technology matters and margins are higher.

數字廣告作為一個整體講述了這個故事。我們戰略的一部分是在數字廣告預算在渠道之間轉移時遵循數字廣告預算，並在技術重要且利潤更高的快速增長市場中建立牢固的立足點。

In our 2023 second quarter performance, we also continue to outperform the industry on revenue growth Growing our revenue by 22% over the same quarter last year to above $178 million. What is even more Impressive is that we achieved that against the backdrop of continued economic headwinds and uncertainties.

在我們 2023 年第二季度的業績中，我們的收入增長也繼續跑贏行業，我們的收入比去年同期增長了 22%，達到 1.78 億美元以上。更令人印象深刻的是，我們在經濟持續逆風和不確定性的背景下實現了這一目標。

Another indicator of our outstanding Q2 performance is our EBITDA that grew by an impressive 45% Year-over-year. Our strong results are attributed to our focus on growing profitability and margin expansion. Our innovation, execution abilities and operational efficiency are the main factors that led to our amazing EBITDA growth and our incredible EBITDA margin, among the highest in the industry.

我們第二季度業績出色的另一個指標是 EBITDA，同比增長了 45%，令人印象深刻。我們的強勁業績歸功於我們對盈利能力增長和利潤率擴張的關注。我們的創新、執行能力和運營效率是導致我們驚人的 EBITDA 增長和令人難以置信的 EBITDA 利潤率躋身行業最高水平的主要因素。

Let’s take a deep dive into our retail media business and understand what enables us to build this activity. Perion retail business is a great example of how we bring together skills and technology in a powerful way that allows us to grow our market share.

讓我們深入了解我們的零售媒體業務，並了解是什麼讓我們能夠開展這項活動。 Perion 零售業務是我們如何以強大的方式將技能和技術結合起來以擴大市場份額的一個很好的例子。

Behind those growth numbers is a smart platform. It is designed to enable large retailers to leverage their own data for greater sales, loyalty and ROI. We are replacing the outdated circular that has been around for over 100 years with the accuracy of digital targeting. Our magic begins with three layers of data: the anonymized retail data, the third party enrichment data that includes, among others: demographic behavioral, contextual, location, and other environmental conditions; and finally and one of the most Important parts, is our own proprietary iHUB data.

這些增長數字的背後是一個智能平台。它旨在使大型零售商能夠利用自己的數據來提高銷售額、忠誠度和投資回報率。我們正在用精確的數字定位來取代已經存在了 100 多年的過時的通告。我們的魔法始於三層數據：匿名零售數據、第三方豐富數據，其中包括：人口行為、背景、位置和其他環境條件；最後，也是最重要的部分之一，是我們自己專有的 iHUB 數據。

All three layers are then being added to our AI-driven decisioning engine to produce thousands of dynamic creative permutations. Perion’s solution allows us to deliver relevant personalized and localized ad experiences. For example, we can customize our retail ad creatives to reflect local weather. If it’s raining in one city, they will see an ad for a comforting soup, yet if It’s hot and sunny, the local ads will promote ice cream. Thanks to SORT, our AI-based cookie-less targeting technology, we can now target the right product to the right person at the right moment.

然後，所有三個層都被添加到我們的人工智能驅動的決策引擎中，以產生數千種動態創意排列。 Perion 的解決方案使我們能夠提供相關的個性化和本地化廣告體驗。例如，我們可以定制零售廣告創意以反映當地天氣。如果某個城市正在下雨，他們會看到一則令人舒心的湯的廣告，但如果天氣炎熱且陽光明媚，當地的廣告將推銷冰淇淋。借助我們基於人工智能的無 cookie 定位技術 SORT，我們現在可以在正確的時間將正確的產品定位到正確的人。

Our dynamic retail solution is distributed across all our media channels, as you would expect from a unified solution such as ours. Our technology has already won the Retail Touchpoint Award for Brand Experience and the hearts of some of the biggest retailers, such as Kroger, Rite Aid, Home Depot Albertsons and more. They are all working with us to drive meaningful business results.

我們的動態零售解決方案分佈在我們所有的媒體渠道中，正如您對我們這樣的統一解決方案的期望。我們的技術已經贏得了品牌體驗零售接觸點獎，並贏得了克羅格、Rite Aid、Home Depot Albertsons 等一些最大零售商的青睞。他們都在與我們合作，推動有意義的業務成果。

Before we dive into the numbers, I’d like to thank all of you, many of whom have been following Perion for a long time. Your continued support and belief in the Company is invaluable.

在我們深入研究這些數字之前，我要感謝你們所有人，其中許多人長期以來一直關注 Perion。您對公司持續的支持和信任是無價的。

As you will now see, the future of Perion is brighter than ever. I invite you to review the Q2 results presented by our CFO, Maoz Sigron.

正如您現在將看到的，Perion 的未來比以往任何時候都更加光明。我邀請您查看我們的首席財務官 Maoz Sigron 公佈的第二季度業績。

Thank you, Tal. Good afternoon and good morning to those of you joining us from the U.S. I am very proud of the financial and business results Perion achieved for the second quarter of 2023. We built on the success of the first quarter, experiencing growing momentum.

謝謝你，塔爾。來自美國的各位下午好，早上好。我對 Perion 在 2023 年第二季度取得的財務和業務成果感到非常自豪。我們在第一季度的成功基礎上，經歷了不斷增長的勢頭。

Perion continues to outperform the ad tech industry against the backdrop of continuing economic headwinds and uncertainty. Our ability to attain these results further demonstrates our strength as a global multi-channel advertising technology company.

在持續的經濟逆風和不確定性的背景下，Perion 的表現繼續優於廣告技術行業。我們取得這些成果的能力進一步證明了我們作為全球多渠道廣告技術公司的實力。

Our second quarter numbers show that our strong Technology infrastructure, our diversified product portfolio and our agility to keep up with market trends uniquely positions us for success.

我們第二季度的數據表明，我們強大的技術基礎設施、多元化的產品組合以及緊跟市場趨勢的敏捷性使我們擁有獨特的成功優勢。

Our strong results are also attributable to our focus on growing profitability and margin expansion, as well as implementation of our efficiency measures throughout our business operations. This is coupled with Perion’s commitment to innovation and execution of our business plans across our key growth drivers such as video, CTV and retail media. We are fully committed to continue our profitable growth through product innovation and through acquisitions.

我們的強勁業績還歸功於我們對盈利能力增長和利潤率擴張的關注，以及在整個業務運營中實施效率措施。這與 Perion 對視頻、CTV 和零售媒體等關鍵增長驅動因素的創新和執行業務計劃的承諾相結合。我們完全致力於通過產品創新和收購來繼續實現盈利增長。

Let’s review the quarter’s financial highlights. Revenue grew by 22% year-over-year to $178.5 million. Contribution ex-TAC for the quarter grew by 27% year-over-year to $77 million. Adjusted EBITDA for the Quarter grew by 45% year-over-year to $41.2 million. GAAP net income increased by 10% year-over-year To $21.4 million, and non-GAAP diluted EPS grew by 65% year-over-year to $0.84 per diluted share.

讓我們回顧一下本季度的財務亮點。收入同比增長 22% 至 1.785 億美元。該季度扣除 TAC 的貢獻同比增長 27% 至 7700 萬美元。本季度調整後 EBITDA 同比增長 45%，達到 4120 萬美元。 GAAP 淨利潤同比增長 10%，達到 2140 萬美元，非 GAAP 攤薄後每股收益同比增長 65%，達到攤薄每股 0.84 美元。

The quarterly revenue clearly shows how we are consistently growing our top line year-over-year. The Revenue for the second quarter was $178.5 million, an increase of 22% year-over-year that reflects a Strong continued two-year CAGR of 28%.

季度收入清楚地表明我們的收入如何逐年持續增長。第二季度收入為 1.785 億美元，同比增長 22%，反映出連續兩年 28% 的強勁複合年增長率。

Display advertising revenue for the second quarter increased by 22% year-over-year to $99.4 million Accounting for 56% of total revenue. SORT revenue increased by 84% year-over-year, representing 21% Display advertising revenue compared with 14% in the second quarter last year. Our retail media business Continued to accelerate, growing 63% year-over-year, accounting for 10% of display advertising revenue versus 8% last year. Video increased by 14% year-over-year, representing 41% of display advertising. Revenue compared with 44% in the second quarter last year.

第二季度展示廣告收入同比增長22%至9940萬美元，佔總收入的56%。 SORT 收入同比增長 84%，佔展示廣告收入的 21%，而去年第二季度為 14%。我們的零售媒體業務繼續加速，同比增長 63%，佔展示廣告收入的 10%，而去年為 8%。視頻同比增長 14%，佔展示廣告的 41%。營收較去年第二季度增長44%。

CTV revenue more than doubled compared With the second quarter of 2022, representing 7% of display advertising revenue versus 4% last year. Search advertising revenue for the second quarter grew by 21% year-over-year to $79.1 million, 44% of Total revenue. Average Daily Searches during the quarter grew by 68% year-over-year to 28.6 million. This was driven by a 28% year-over-year increase in the number of search advertising publishers to 159 . And by increased traffic from existing publishers. RPM has also gradually increased in comparison with the first quarter this year.

與 2022 年第二季度相比，CTV 收入增長了一倍多，佔展示廣告收入的 7%，而去年為 4%。第二季度搜索廣告收入同比增長 21% 至 7910 萬美元，佔總收入的 44%。該季度的平均每日搜索量同比增長 68%，達到 2860 萬次。這是由於搜索廣告發布商數量同比增長 28%，達到 159 家。以及現有發布商流量的增加。與今年第一季度相比，RPM 也逐漸上升。

Contribution excluding TAC was $77 million or 43% of revenue, compared with 41% of revenue in the Second quarter last year. This margin expansion was primarily due to improved product mix and also Thanks to media buying optimization enabled by leveraging data and buying power as part of our Intelligent HUB (iHUB).

不包括 TAC 的貢獻為 7700 萬美元，佔收入的 43%，而去年第二季度佔收入的 41%。利潤率的增長主要歸功於產品組合的改進，同時也得益於通過利用數據和購買力作為我們的智能 HUB (iHUB) 的一部分實現的媒體購買優化。

Our continued implementation of efficiency measures coupled with a focus on growth in high margin Businesses, helped us to generate Adjusted EBITDA of $41.2 million, an increase of 45% over the second Quarter last year. Adjusted EBITDA margin increased from 19% to 23% this year, while Adjusted EBITDA To contribution excluding TAC margin increased from 47% to 54% this year. This dramatic improvement is due to continuous investment in innovation and cost control, resulting in a very strong incremental margin.

我們持續實施效率措施，加上對高利潤業務增長的關注，幫助我們實現了 4120 萬美元的調整後 EBITDA，比去年第二季度增長了 45%。今年調整後的 EBITDA 利潤率從 19% 增至 23%，而不包括 TAC 利潤率的調整後 EBITDA 貢獻率今年從 47% 增至 54%。這種顯著的改善得益於對創新和成本控制的持續投資，從而帶來了非常強勁的增量利潤。

On a GAAP basis, second quarter net income was $21.4 million or $0.43 per diluted share, an increase of 10% compared with $19.5 million or $0.41 per diluted share in the second quarter last year. GAAP net Income includes a fair value adjustment of the contingent consideration payable with respect to the Vidazoo acquisition of $14.6 million. During the quarter, we amended the Vidazoo share purchase Agreement as a result of their outstanding performance during the earn-out period.

按 GAAP 計算，第二季度淨利潤為 2140 萬美元，即稀釋後每股收益 0.43 美元，較去年第二季度的 1950 萬美元，即稀釋後每股收益 0.41 美元增長 10%。 GAAP 淨收入包括對 Vidazoo 收購應付的或有對價的公允價值調整 1,460 萬美元。由於 Vidazoo 在盈利期內的出色表現，我們在本季度修改了 Vidazoo 股份購買協議。

Our strong cash position and effective cash management generated $5.2 million of financial income in the second quarter . We also enjoyed an effective tax rate of approximately 15% as a result of our disciplined tax planning. On a non-GAAP basis, second quarter net income was $42.1 million or $0.84 per diluted share, an increase of 72% compared with $24.5 million or $0.51 per diluted share in the second quarter last year.

我們強大的現金狀況和有效的現金管理在第二季度創造了 520 萬美元的財務收入。由於我們嚴格的稅務規劃，我們還享有約 15% 的有效稅率。按非公認會計準則計算，第二季度淨利潤為 4210 萬美元，即稀釋後每股收益 0.84 美元，較去年第二季度的 2450 萬美元，即稀釋後每股收益 0.51 美元增長 72%。

Over the past three years, Perion consistently demonstrated our ability to implement efficiency measures throughout our business operations. Non-GAAP OpEx and COGS decreased to 20% from revenue compared with 22% in the second quarter last year. EBITDA per FTE dramatically increased from $56,000 in the second quarter last year to $82,000 this quarter. This impressive improvement in productivity is a testament to our business strategy execution. This created an efficient operational Infrastructure that allows incremental top and bottom line growth at lower cost.

在過去三年中，Perion 始終如一地展示了我們在整個業務運營中實施效率措施的能力。非 GAAP 運營支出和銷貨成本佔收入的比例從去年第二季度的 22% 下降至 20%。每 FTE 的 EBITDA 從去年第二季度的 56,000 美元大幅增加到本季度的 82,000 美元。生產力的顯著提高證明了我們業務戰略的執行力。這創建了一個高效的運營基礎設施，可以以更低的成本實現收入和利潤的增量增長。

Second quarter operating cash flow was $47.4 million compared with $25.7 million in the second quarter of 2022. This strong operating cash flow was driven by strong collections in the second quarter. They Included an $8 million customer collection that shifted from March to April this year. As of June 30, 2023 our cash and cash equivalents, short term bank deposits and marketable securities increased from $436 million at the end of the first quarter to $483 million at the end of the second quarter.

第二季度運營現金流為 4740 萬美元，而 2022 年第二季度為 2570 萬美元。這一強勁的運營現金流是由第二季度強勁的收款推動的。其中包括從今年 3 月轉移到 4 月的 800 萬美元客戶收款。截至2023年6月30日，我們的現金和現金等價物、短期銀行存款和有價證券從第一季度末的4.36億美元增加到第二季度末的4.83億美元。

We are encouraged by the strong results we achieved in the first half of the year and therefore we are raising our 2023 annual guidance to reflect increased profitability and margin expansion.

我們對上半年取得的強勁業績感到鼓舞，因此我們上調了 2023 年年度指引，以反映盈利能力的提高和利潤率的擴張。

Our new revenue guidance represents a 16% year-over-year growth at the midpoint. Adjusted EBITDA is expected to grow at least 26% year-over-year.

我們新的收入指引中值同比增長 16%。調整後 EBITDA 預計同比增長至少 26%。

This concludes my financial overview. We will be happy to answer any of your questions. Operator, the stage is yours.

我的財務概述到此結束。我們很樂意回答您的任何問題。接線員，舞台是你的。

(Operator Instructions) The first question is coming from Laura Martin of Needham & Company.

（操作員說明） 第一個問題來自 Needham & Company 的 Laura Martin。

Can you guys hear me okay?

你們能聽到我說話嗎？

Yes.

是的。

Good morning Tal, welcome to the top seat. So what I'm interested in learning from you is you've been sitting in the search seat for the last 5 years. I'm interested as CEO, what you want to achieve in search over the next 2 or 3 years and what you want to achieve in the other half of the business you haven't run in the past over the next 3 years, please?

早上好，塔爾，歡迎來到最高座位。所以我有興趣向您學習的是您在過去 5 年裡一直坐在搜索席位上。作為首席執行官，我很感興趣，您希望在未來 2 到 3 年內在搜索領域實現什麼目標，以及您希望在未來 3 年內在您過去未經營的另一半業務中實現什麼目標？

Absolutely, absolutely. Thanks for joining me. Thanks for asking the question. So on search, we obviously looking to grow. We're increasing the number of publishers through that, the number of searches, and we are constantly looking for more and more strategic publishers to be added to our network.

絕對，絕對。感謝您加入我。感謝您提出問題。因此，在搜索方面，我們顯然希望實現增長。我們正在通過搜索數量增加發布商的數量，並且我們不斷尋找越來越多的戰略發布商添加到我們的網絡中。

And on the other side, on the advertising side, and display side, we're constantly investing, as you saw in the presentation in other verticals, so to expand our display advertising solution into other verticals such as retail. And all of that is going to be through investment in technology and so that's the organic part and M&As. So we're constantly looking to add more and more technologies and more and more companies. And that's the goal to keep increasing both sites.

另一方面，在廣告方面和展示方面，正如您在其他垂直領域的演示中看到的那樣，我們不斷投資，以便將我們的展示廣告解決方案擴展到零售等其他垂直領域。所有這一切都將通過技術投資來實現，這就是有機部分和併購。因此，我們不斷尋求添加越來越多的技術和越來越多的公司。這就是不斷增加兩個站點的目標。

And then my second question is on generative AI. I know you guys are using Microsoft Cloud in generative AI, and you are integrating that into your products. Can you talk about your road map over the next two or three years and how you think about using generative AI to make your products better,Please?

我的第二個問題是關於生成人工智能。我知道你們在生成人工智能中使用微軟雲，並且正在將其集成到您的產品中。您能談談您未來兩三年的路線圖以及您如何考慮使用生成式人工智能來使您的產品變得更好嗎？

Yes, absolutely. So without going into too many details on specific features, we're investing heavily in generative AI. Again, as you saw in the presentation, creating thousands of permutations in each ad based on data. So one person in the specific location we get a specific ad on another location, we'll get a different ad. and we’re now adding another layer of generative AI to add brand safety, because you know generative AI keeps randomly create images, so we want to make sure it’s a brand-safe environment, that nothing would be broken on those images, so that’s another layer that we are investing in.

是的，一點沒錯。因此，我們在生成人工智能方面投入了大量資金，但無需過多討論特定功能的細節。同樣，正如您在演示文稿中看到的那樣，根據數據在每個廣告中創建數千種排列。因此，當一個人在特定位置時，我們會看到特定的廣告，而在另一個位置上，我們會看到不同的廣告。我們現在正在添加另一層生成式人工智能來增加品牌安全性，因為你知道生成式人工智能不斷隨機創建圖像，所以我們希望確保它是一個品牌安全的環境，這些圖像不會被破壞，所以這是我們投資的另一層。

Again, I think through the year, we’re going to show more and more things that we’re releasing. I don’t want to ruin the surprise, but we are working on a few pretty incredible things.

再次強調，我認為這一年我們將展示越來越多的產品。我不想破壞這個驚喜，但我們正在做一些非常令人難以置信的事情。

Thank you. The next question is coming from Andrew Marok of Raymond James.

謝謝。下一個問題來自 Raymond James 的 Andrew Marok。

Again, welcome to the seat. First question for me. I wanted to dig a little bit deeper on the search volume versus revenue per query dynamic. I know we saw some comp issues from pricing strength this time last year. But does that account for the entirety of the revenue per query decline? I mean, I know you're also growing publishers at a good clip. Are there any characteristics or attributes of the new publishers coming on that could affect that volume versus pricing situation?

再次歡迎大家入座。我的第一個問題。我想更深入地了解搜索量與每次查詢收入的動態關係。我知道去年這個時候我們看到了一些來自定價優勢的競爭問題。但這是否是每次查詢收入下降的全部原因？我的意思是，我知道你們的出版商也在快速增長。新出版商的任何特徵或屬性是否會影響銷量與定價情況？

No. So let's divide it into 2 parts, right? So we're in charge of adding publishers, which are adding searches. That's our side. Price, the economic unit of what we call RPM, which is per thousand searches, that’s not based on us, that’s based on the economic conditions, advertising budgets. Those are things that are not based on our ability to control. This is why we’re not focused on RPMs because we can’t control that.

不，所以我們把它分成兩部分，對嗎？因此，我們負責添加發布商，而發布商則添加搜索。那是我們這邊。價格，我們所說的每千次搜索的經濟單位，它不是基於我們，而是基於經濟條件和廣告預算。這些事情不是基於我們控制能力的。這就是為什麼我們不關注 RPM，因為我們無法控制它。

That’s the economic conditions. We’re focusing on adding more and more publishers, which are going to add more and more searches. That’s the game here.

這就是經濟條件。我們專注於增加越來越多的發布商，這將增加越來越多的搜索。這就是遊戲。

Okay. And then on the margin side, another really good margin quarter. It seems that you have another -- a number of tech-focused opportunities in front of me, whether it's building out the CTV and retail media businesses, expanding and advancing sort and iHub to say nothing of, for instance, the generative AI opportunities that are yet to come that you've talked about. R&D spend was down again Q-over-Q in absolute dollars in 2Q. So how do you think about that tech and product investment, is there room to maybe devote more spend since you're running at such high margins?

好的。然後在利潤方面，另一個利潤率非常好的季度。看來你還有另一個——許多以技術為中心的機會擺在我面前，無論是建立 CTV 和零售媒體業務、擴展和推進排序和 iHub，更不用說，例如，生成人工智能機會你談到的那些事情還沒有到來。第二季度研發支出以絕對美元計算環比再次下降。那麼，您如何看待技術和產品投資？既然您的利潤率如此之高，是否還有空間投入更多支出？

Do you want to take that?

你想接受嗎？

Yes, so first, we are taking this advantage to be competitive and to be able to keep the good momentum and to make sure that we are attractive, and we can definitely share this great margin also with our partners and our customers. This is first, and I agree with you - and we agree with you - that as we have very good margin on the gross, we’re talking about 43%, on the net this is above 50%, so we have definitely margins that we can translate into investment that will help us to keep the great momentum.

是的，所以首先，我們利用這一優勢來保持競爭力，並能夠保持良好的勢頭並確保我們具有吸引力，並且我們絕對可以與我們的合作夥伴和客戶分享這一巨大的利潤。首先，我同意你的觀點，我們也同意你的觀點，因為我們的毛利率非常高，我們談論的是 43%，淨利率高於 50%，所以我們絕對有利潤我們可以將其轉化為投資，幫助我們保持強勁的勢頭。

When thinking about 2025, 2026 with different investments. This is something that is happening, and of course part of what we have today on the R&D including investment, but there is more to come and this is more a long term plan, but we are definitely adapting with the flexibility that we have based on our current financials.

當考慮 2025 年、2026 年不同的投資時。這是正在發生的事情，當然也是我們今天研發（包括投資）的一部分，但還會有更多，這更是一個長期計劃，但我們肯定會根據我們所擁有的靈活性進行調整我們目前的財務狀況。

The next question is coming from Jason Helfstein of Oppenheimer.

下一個問題來自奧本海默的賈森·赫夫斯坦。

Can you hear me now?

你能聽到我嗎？

Yes.

是的。

So 2 questions. The retail media has become 10% of ad revenue very quickly. What's your incremental value-add versus other solutions in the market? And where do you think the mix goes over the next 18 months? And then second, cash continues to grow. What's the catalyst to do an acquisition? And if you're not finding something that's meeting your targets, would you consider share buybacks?

所以有2個問題。零售媒體很快就佔廣告收入的10%。與市場上的其他解決方案相比，您的增量增值是多少？您認為未來 18 個月的組合會走向何方？其次，現金持續增長。進行收購的催化劑是什麼？如果您沒有找到符合您目標的東西，您會考慮股票回購嗎？

Thanks for the question. So first of all, retail media, I think the name of the game there is data. So once you connect your systems to the retail data, it's within the house. So you can create more and more campaign, and that continues to grow, right?

謝謝你的提問。所以首先，零售媒體，我認為遊戲的名稱是數據。因此，一旦您將系統連接到零售數據，它就在家裡。所以你可以創建越來越多的活動，並且活動會持續增長，對嗎？

As opposed to other segments in online advertising as a whole, retail media is a lot more stickier. So we predict that this will continue to grow. As for the other question, M&As, we're aiming to become even bigger in our revenue and our growth. So we definitely need to buy companies.

與整個在線廣告的其他部分相比，零售媒體更具粘性。因此，我們預測這一數字將繼續增長。至於另一個問題，即併購，我們的目標是在收入和增長方面變得更大。所以我們肯定需要收購公司。

We're growing organically, as you can see, retail is organically. CTV is organically. We didn't buy companies to that. But if we want to continue to grow even faster for that, we're looking for M&As, again, M&A is at those specific verticals is very attractive for us. So CTV, out-of-home, maybe some technological components for retail media. Those are the companies we're looking at, and that's our main focus. To use that to continue to grow. So that's our fuel for continued growth.

我們正在有機增長，正如你所看到的，零售業是有機增長的。 CTV是有機的。我們收購公司並不是為了這個目的。但如果我們想繼續更快地增長，我們就會尋求併購，同樣，這些特定垂直領域的併購對我們來說非常有吸引力。因此，CTV、戶外媒體，也許是零售媒體的一些技術組件。這些是我們正在關注的公司，也是我們的主要關注點。用它來繼續成長。這就是我們持續增長的動力。

Jason, did you have any additional questions? Your line was muted.

傑森，您還有其他問題嗎？你的線路被靜音了。

No, that's it. Thank you.

不，就是這樣。謝謝。

Thank you. The next question is coming from Mark Kelley of Stifel.

謝謝。下一個問題來自 Stifel 的馬克·凱利 (Mark Kelley)。

I wanted to focus on CTV, obviously, very nice growth outpacing the industry. Anything you would call out there that stood out in terms of whether it's ad units or different tact creative that outperformed relative to the rest of it? And then second, on the search side, I totally get that you guys are continuing to add publishers. Your growth outpaced the growth at Microsoft or at least the segment that search would fall into. Can we also read into that I assume that maybe Bing is a smaller contributor? I know you're adding search partners as well.

我想專注於 CTV，顯然，它的增長速度非常快，超過了整個行業。您會指出哪些突出的方面，無論是廣告單元還是其他策略創意，相對於其他部分錶現優於其他內容？其次，在搜索方面，我完全明白你們正在繼續添加發布商。你們的增長超過了微軟的增長，或者至少超過了搜索領域的增長。我們是否還可以理解我認為 Bing 的貢獻者可能較小？我知道您也在添加搜索合作夥伴。

So CTV, we don’t have a breakdown per creative, but CTV is really growing. Live CTV, is a great growth engine for us. We’re using live CTV on sports events, especially now that people are looking at more live events as opposed to content, if you know about whatever is going out in Hollywood with fresh content.

因此，CTV，我們沒有對每個創意進行細分，但 CTV 確實在增長。直播 CTV，對我們來說是一個巨大的增長引擎。我們在體育賽事中使用直播 CTV，尤其是現在人們更多地關注現場賽事而不是內容，如果您了解好萊塢正在發生的新鮮內容的話。

So live CTV is definitely solving that. That’s the CTV part. What was the other question - search?

所以直播 CTV 肯定能解決這個問題。這就是 CTV 的部分。另一個問題是什麼——搜索？

Yes, Search, let's separate the adding publisher side. Can we assume that also your other search partners are maybe mixing up and becoming a bigger part of that segment for you?

是的，搜索，讓我們將添加發布者端分開。我們是否可以假設您的其他搜索合作夥伴也可能混合在一起並成為您該細分市場的更大組成部分？

Yes. So again, we are working with more than one search partner. Obviously, Microsoft is the biggest one here, but we currently work with more partners to diversify through different countries, different devices. So we definitely have a mix.

是的。再說一次，我們正在與不止一個搜索合作夥伴合作。顯然，微軟是這裡最大的公司，但我們目前與更多合作夥伴合作，通過不同國家、不同設備實現多元化。所以我們肯定有一個混合。

The next question is coming from Jason Schmidt of Lake Street.

下一個問題來自湖街的傑森·施密特。

Sorry I've missed it. But on the search side, it continues to be strong on the publisher growth. Do you see continued publisher growth over the next 12 months? Or does it cool off?

抱歉我錯過了。但在搜索方面，出版商的增長仍然強勁。您認為未來 12 個月出版商會持續增長嗎？還是涼了？

We work at full speed ahead to add more and more publishers. We don't see any slows in the amount of publishers we're adding. So from the visibility we have now, it seems like it's going to continue growing.

我們全速前進，以增加越來越多的發布商。我們沒有看到我們添加的發布商數量有任何放緩。因此，從我們現在的可見度來看，它似乎將繼續增長。

Okay. Great. And then just as a follow-up, Tal, any areas you'll be focused on to a greater extent as far as people, process or product development?

好的。偉大的。作為後續行動，塔爾，您將在更大程度上關注人員、流程或產品開發等領域？

I think technology is what drives all parts of digital advertising. So we're going to kind of focus really hard on technology, AI. We have 2 teams of AI here, one for the supply part, one to the demand part. We constantly invest more and more in that. And we're constantly looking to add more technologies into all our businesses, all our activities. For example, adding more data features to our retail activity. So strengthening what we do now and adding more things. That's our focus.

我認為技術是數字廣告各個部分的驅動力。因此，我們將非常關注技術、人工智能。我們這裡有兩支人工智能團隊，一支負責供應部分，一支負責需求部分。我們不斷加大這方面的投資。我們不斷尋求在我們所有的業務、所有的活動中添加更多的技術。例如，為我們的零售活動添加更多數據功能。因此，加強我們現在所做的事情並添加更多東西。這是我們的重點。

The next question is coming from Jeff Martin of ROTH .

下一個問題來自羅斯的傑夫·馬丁。

I wanted to ask a couple more questions around search. The first is how does growth in international markets compare to, say, the U.S. or North America? I know with the renewed partnership with Bing a while back, international expansion was a big part of that, then secondly, are you seeing any noticeable impact from ChatGPT with respect to Microsoft Bing?

我想問幾個有關搜索的問題。首先是國際市場的增長與美國或北美相比如何？我知道不久前與 Bing 重新建立了合作夥伴關係，國際擴張是其中的重要組成部分，其次，您是否看到 ChatGPT 對 Microsoft Bing 產生了任何明顯的影響？

Yes, so we’ve added a lot more countries with the new agreements we signed two years ago, but still the majority of our business with Microsoft is in the U.S., but we do have a lot of activities across Europe. It’s definitely a good addition that we have those countries.

是的，所以我們在兩年前簽署的新協議中增加了更多的國家，但我們與微軟的大部分業務仍然在美國，但我們在歐洲確實有很多活動。擁有這些國家絕對是一個很好的補充。

Now on the ChatGPT part, I think we all agree that generative AI is the future of the internet, not just Advertising. Having said that, I think it’s really early days to see how this movers forward and in what way.

現在，在 ChatGPT 部分，我想我們都同意生成式人工智能是互聯網的未來，而不僅僅是廣告。話雖如此，我認為現在觀察這一趨勢如何以及以何種方式向前發展還為時過早。

From our conversations with Microsoft, we have a great belief in Microsoft Advertising, that they can make Microsoft Bing even greater and add those features to create stickiness and more engagement, but it’s early days.

從我們與 Microsoft 的對話中，我們對 Microsoft Advertising 充滿信心，他們可以讓 Microsoft Bing 變得更加強大，並添加這些功能來創造粘性和更多的參與度，但現在還處於早期階段。

Everybody is releasing their own AI chatbot and it’s great, and I think this is really driving technology forward; but at the end of the day, it doesn’t drive -- currently it doesn’t drive a lot of advertising budgets like extra advertising budgets, so it’s early days. We’ll have to wait.

每個人都在發布自己的人工智能聊天機器人，這很棒，我認為這確實推動了技術的發展；但歸根結底，它並沒有推動——目前它並沒有推動大量廣告預算，比如額外的廣告預算，所以現在還處於早期階段。我們必須等待。

Great. And then for my follow-up question, your flow-through of incremental revenue to EBITDA is about a 40% margin. That's pretty consistent the last 6 quarters. Just curious if you think that's a sustainable flow-through rate. And as a second part of that question, your customer acquisition and media buy cost have come down percent of revenue. Do you think that trend persists.

偉大的。對於我的後續問題，您的增量收入流向 EBITDA 的利潤率約為 40%。過去 6 個季度的情況非常穩定。只是好奇您是否認為這是一個可持續的流通率。作為該問題的第二部分，您的客戶獲取和媒體購買成本已下降了收入的百分比。您認為這種趨勢會持續下去嗎？

So thank you for the question. We definitely always trying to find the area for first for investment is -- we get a question before, and this is one angle. And the second angle is how we are optimizing first the media buying and based on the fact that we are growing the business and getting more and more opportunities.

謝謝你的提問。我們肯定總是試圖找到第一個投資領域 - 我們之前收到一個問題，這是一個角度。第二個角度是我們如何首先優化媒體購買，並基於我們正在發展業務並獲得越來越多機會的事實。

We can -- with the iHUB we can have a better margin. But this is something that where we are today with the 43% of the second quarter is very much aligned with the product mix of the second quarter as we're expecting to get to the second half of the year, we're expecting the year to be around 42%.

我們可以——通過 iHUB，我們可以獲得更好的利潤。但這是我們今天的情況，第二季度的 43% 與第二季度的產品組合非常一致，因為我們預計到今年下半年，我們預計今年約為42%。

So Q3 will be similar to Q2 and Q4 with the product mix will be lower than that. Again, not dramatic with the number around the 40% in Q4. If you're thinking about '24, again, we are now with model that is very optimized with the app and how we implement it. I will not assume something that is more than that.Once we will end other things that we are doing, we will reflect it. But currently, this is more or less reflect the forecast and our model and how we're expecting to end the year from a margin point of view.

因此，第三季度將與第二季度和第四季度類似，但產品結構將低於第二季度和第四季度。同樣，第四季度的數字在 40% 左右，這一數字並不引人注目。如果您再次考慮 '24，我們現在擁有針對應用程序及其實現方式進行了非常優化的模型。我不會假設更多的事情。一旦我們結束了我們正在做的其他事情，我們就會反思它。但目前，這或多或少反映了預測和我們的模型以及我們預計如何從利潤的角度結束今年。

The next question is a follow-up from Mark Kelley of Stifel. Mr. Kelley, yes a follow-up.

下一個問題是 Stifel 的 Mark Kelley 的後續問題。凱利先生，是的，後續行動。

I will ask another one. On the SORT products, is there still a plan to maybe monetize that over the long run, or do you still see that as something that is just a nice to have and something that brings more advertising to the platform?

我再問一個。在 SORT 產品上，從長遠來看，是否仍有計劃將其貨幣化，或者您仍然認為這是一件好事，並且可以為平台帶來更多廣告？

Sure. So I think SORT is a bit more than just nice to have. It's -- currently, we're using that as a secret sauce to gain more and more advertising budgets and one campaign through that. And I think the numbers are showing that we're gaining -- it gains traction and pulls more campaigns to work, and we'll continue to use it that way. As we think about what is SORT 2.0,where can we take this even further, maybe more platforms, maybe more countries, maybe more models; but currently it helps us drive more results, which is great.

當然。所以我認為 SORT 不僅僅是擁有它那麼好。目前，我們正在利用它作為秘密武器來獲得越來越多的廣告預算和一項活動。我認為這些數字表明我們正在取得進展——它獲得了牽引力並吸引了更多的活動發揮作用，我們將繼續以這種方式使用它。當我們思考什麼是SORT 2.0時，我們可以在哪裡更進一步，也許更多的平台，也許更多的國家，也許更多的模型；但目前它可以幫助我們取得更多成果，這很棒。

We are showing no additional questions in queue at this time. Did you have any additional or closing comments today?

目前，我們在隊列中沒有顯示任何其他問題。您今天還有任何補充意見或結束語嗎？

Thank you everyone for joining us and hope to see you next time.

感謝大家加入我們，並希望下次再見。

Thank you. Ladies and gentlemen, this concludes today's conference. You may disconnect your lines and walk off the webcast at this time, and enjoy the rest of your day.

謝謝。女士們、先生們，今天的會議到此結束。此時您可以斷開線路並退出網絡廣播，享受剩下的一天。