Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
In their new model, the PH analyst talks about a near doubling of Group FCF for 24 and 25. When he mentions the doubling, its not clear what is being doubled ; not the actual 23 number but their initial view of 24 is what I'm assuming. However this % increase is far in excess of Cavendish's remodeling numbers from their note. Yes, it would be nice to see the PH numbers.
Hi Gdog, thanks - I took a look and yes lots of investors pondering similar thoughts. Probably too many questions at this point and the overriding concern that Tal was full of confidence on the MS relationship only a few weeks earlier. The conference calls were as (or more) misleading than any of Nexxens. Although Nexxen has spread its despair over two years. At this point ,I guess I'll stick with major holdings in Nexxen and Viant.
Hi Gdog, obviously the new guidance is all bad news but specifically does the drop in EBITDA guidance from 180 to 80 surprise you? It seems that this is a disproportionate drop which either leads me to think that the search biz was the more profitable or that other profitable parts of the biz outside search are expected to be also impacted. Any thoughts on which this is.
It does all seem to come as a big surprise to Tal. A month or two ago I listened to the broker conferences and he sounded very bullish about the MS relationship - made it sound like it was a given.
They have circa $500m in cash; which given the relatively low ad-tech valuations presently could be money very well spent but with the unexpected nature of the MS news perhaps there is a risk of a hasty purchase or two?
Hi Gdog, also sorry to hear the bad news on Perion. Ad tech is not for the faint of heart that's for sure.
Knowing the stock so well I'm interested in hearing your thinking now. After the shock; do you see it as a potential buying opportunity with the market over-reacting or is it a wait and see for now? If we assumed the search is a write off at this point is the rest of the biz even better value after the SP crash? For the brave is it a potential opportunity?
On the other board, they think Tosca maintained their overall position through derivatives, unsure whether this is pure conjecture on their part or not. The fact that they bought net ADRs and sold on London does suggest that its perhaps got more complexity than a straightforward reduction.
The ad-tech valuations are all very interesting at the moment. For example, when you consider Viant's valuation based on its fundamentals compared to both PERI and NEXN. PERI has performed well for the last two years and is either slightly down or flat, whilst DSP is up having performed relatively poorly over those same two years. But its up over 100% in the last year because its staged a recovery from after a poor year - lots to ponder over.
On the matter of another share investment interest - PERI.
NEXN is projecting 9% growth ex-TAC this year, coincidentally it achieved 9% in programmatic this year.
PERI is projecting 10% pro-forma. Last year it guided 14% and achieved 16%. There seems to be some convergence with other public ad-techs (outside of Viant and TTD) with the same growth range.
What's your thought on PERI's guidance? I guess the reduced growth of EBITDA is perhaps not too surprising given the progress over the past couple of years but the ex-TAC is more surprising perhaps? With the improvement in the macro, one may have thought Perion would be accelerating growth not the reverse. Or do you think its a matter of under-promising and over-delivering?
Gdog, I think concluding that the Amobee purchase was the BIG mistake might be incorrect, sure the wheels came off the cart at around that time but perhaps they were going to come off anyhow. In the recent Needham investor conference, in the Q&A, Ofer appeared to state that "managed service" was 50% of revenue. It appears from previous calls with other adtechs that the Managed service category has suffered perhaps the most in the downturn. I think Amobee with its enterprise self-service capabilities was seen as the solution to Nexxen's reliance on managed service revenues - but it didn't come in time to offset the downturn. In the Q4 results we were informed that self-service ex-TAC more than doubled in 2023. Unfortunately I've not pinned down precisely what % this makes it. Sure the communication around the acquisition was beyond abysmal, expectation setting was unbelievably poor - but Amobee itself may yet turn out to be a good deal.
Firstly, just to say I'm long on DEC and I'm only critiquing the OakBlokes's model as its worth the time to do so unlike the shorter's report which is so full of holes and half truths that its totally unworthy of a review.
So in OB's valuation model there is in my mind an apparent and significant issue with some of the associated conclusions. I want to discuss the key one in this post.
I've verified all the figures from DEC reports concerning PDP and PV10.
Total PDP is 607 in 2020 and 826.6 in 2023H2. That's a 36% increase.
PV10 of Total is 2000 in 2020, and 5904 in 2023H2. That's a 195% increase.
Now the issue is that DEC have been credited with a major uplift in PV10 however surely their role has only been partial, ie. the 36% increase in PDP which all things being equal equates to a corresponding 36% increase in PV10.
Now the question is what else has driven the PV10 increase of 195%? One factor I suspect is the forward pricing curve which I believe has significantly revalued since the end of 2019 but this alone is again not sufficient by my calculations so what else has driven it? The cash margins are pretty constant throughout the period.
Any thoughts? The valuation model interests me but until it can be fully explained.
Quite coincidentally, I just looking at Future and came across the piece below which mirrors my own previous post and even uses the buzzword of "stabilized" again:
"Since then, like a lot of companies, Future’s price has fallen sharply to just 843p due to various macro environmental factors such as falling ad spend and weak consumer confidence, which has reduced e-commerce volumes. Further investor concerns have stemmed from declining online audience numbers for both FY22 and the first half.
H2 shows the worm is turning
But when the company issued an update on 29 September, Future said audience numbers in the second-half had stabilized and it had seen positive month-on-month momentum in the final quarter."
Hi Radium,
Whilst in essence you are of course correct when you write: "it's clear that ad spend is subdued and it is being targeted to where it can produce a quick return rather than building Brands."
The point I was making in my post is that the above left in isolation is a little backwards looking. For trmr and many of the others serious issues in the macro environment started late last year and deepened in Q1 of this year. Although there are still issues and no-one is very confident, my reading is that for most, things have improved since July and some confidence has returned. Yes, SFOR and some others are still suffering but SFOR although in digital advertising; its not pure ad-tec. Most Q3s mentioned "stabilization of conditions" which seems to be the new buzzword for improvement or the returning to more normal conditions.
Anyhow do you have a view on TRMR's Q3 results, I'd be interested in comparing? I was off on Q1, got Q2 pretty much spot on, and now await Q3.
Hi Radium, I'm a little intrigued by your last post. Much like yourself, I have been closely reviewing Q3 ad-tech results and had formed the overall opinion that most were more positive about outlook than in previous quarters. Most have mentioned thru the year, the weakness at the end of last year and at the beginning of this one, and again most had seen further stabilization from July which further consolidated during Q3. From memory, most if not all described this picture to varying degrees.
TTD was somewhat new in describing the early October weakness but then went on to describe it being for two weeks before it re-stabilized. The TTD SP dip is I believe a mixture of factors:
-the SP is priced to perfection some would say so any deviance is punished, SP is still up 32% in a year;
-the strong Q4 growth last year made this year's comparable challenging;
From my analysis DSP has tracked TRMR the most closely quarter on quarter over the past 18 months and more so than any other ad-tech stock. Its Q3 was promising and Q4 guidance again okay so fingers crossed for TRMR.
I don't see the similarities but I don't suppose you posted it because there were any. Just find a company with a corrupt CEO and try and spread the muck - some PIs might be duped - yep same game as you've already played on the other threads. I think any PI looking at our thread can make an informed decision now.
Although nothing is impossible - I doubt if there are more than a select few companies that have gone into receivership 6 or even 12 months after a major equity raise, where the raise was for an acquisition and not to sure up finances. And what you have been suggesting is that DEC operates a fundamentally broken or devious business model - and I'm suggesting that IIs would have steered clear if that had been the case- they have all the resources and access to accounts to avoid it. Still you'll catch a few out with your games.
GG - I think we both know that the SP of a company can be determined by a small number of trades at times. The SP is the lowest price that someone is willing to accept for 1 or more shares at a given time - that's why some sold shell at £9 a couple years ago- I think that answers that one.
II can hold counter positions however unless they are active shorters - they are simply insuring against possible future loss. This does not provide any explanation to why they would seek to invest 10s of millions into a company if they had any doubts, or why II would not be able avoid a fundamentally unsound company. Good try.
GG seems to be having some fun at some PIs expense.
He recently wrote: Ask yourselves this one question.
Are we smarter than the whole market, and see what the rest of the world doesn't, namely this is a fantastic company ...
Sounds reasonable, lets try another. Are some of us smarter than a relatively select few PIs that are being scared into selling, probably by shorters that are making on their fear? I don't see any institutions sales - just PIs. Funny that, I thought it was normally the institutions that were better informed. This recent SP recent fall - who has sold and how many shares?
Or another question - are the financial intuitions that invested £134.9m in the equity raise six months ago at a SP of £1.05 after full disclosure and due diligence really that easy to fool, after all the rigor needed to invest 10s of millions they fell for a floored financial model that has been the same for years - yes well perhaps not.
I said a little while back I'd post some info on the recent Forrester report when I got a moment:
Some good news from my perspective was that Amobee is mid-placed in the strong performers category along with 5 others, the leaders being TTD, AMZN and Google. I was keen to see confirmation from an authoritve source that it was still well regarded, as the last report I had seen was a couple years old from Gartner. However potentially the better news was within the detail of the of the Amobee review as it basically concluded that it excels at every stage of the TV investment cycle, and one quote was "a specialized DSP for TV" rather than an omnichannel juggernaut - and is best for for heavy TV buyers. Although the conclusion points to weaknesses outside TV, I think given the size of the CTV/ linear TV opportunity, its not a bad position to be in strategically and preferable to others that are perhaps more omnichannel capable but excel at nothing. At least there's a solid reason to go with TRMR given a focus on TV. Here's hoping that TRMR can use these capabilities to build on the near term CTV/linear opportunities and build out the capabilities for the other channels in time.
Radium, I concur with your thoughts on Amobee and Forrester have their wave report recently published on DSPs that provide some interesting insights into Amobee and its competitors. When I get a chance I'll include a few of their conclusions but suffice to say it's positive.
Fine thanks Gdog, apart from busy, I trust you are also?
Well, I've been through each of the call transcripts for all of them, some more than once and I believe things are looking okay for TRMR. Its a somewhat complex picture and not simply a macro environment story. Whether TRMR surprise on the negative side is still possible of course but the FD was confident in the last call and that was well into the quarter so fingers crossed. The outlook will of course be the key to sentiment but Viant managed to be positive and I've seen correlation between the two before so ...
Hi Radium, replies to your points below.
1. I believe we do have a good idea of Mediamath's impact on TRMR - a list of creditors with amounts owed was posted at the time and from memory whilst Magnite and Pubm were number one and two, TRMR with Unruly were well down the list at approx. 1M USD.
2. I believe the theme is more nuanced than simply increased media with reduced ad spend. Hence the mixed results - with Viant and TTD both having reasonable results and outlooks. So, Magnite described reduced or pulled upfront being replaced by a push for programmatic - and Magnite have a higher proportion of upfront than programmatic so this impact was more significant for them. TRMR are the reverse.
We should remember that the confidence that TRMR expressed on Q2 during the Q1 call was, in my opinion, of a different order than we'd heard before. The challenges from the brokers were met with real confidence - and opportunities to row back from targets were rebuked.
Gdog - did you get a chance to review the outputs?